You are given the following information: Stockholders’ equity = $323 million; price/earnings ratio = 14; shares outstanding = 8,800,000; and

Question

You are given the following information: Stockholders’ equity = $323 million; price/earnings ratio = 14; shares outstanding = 8,800,000; and market/book ratio =7.7. Calculate the market price of a share of the company’s stock..

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Anna 57 mins 2022-01-10T18:50:17+00:00 1 Answer 0 views 0

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    2022-01-10T18:51:39+00:00

    Answer:

    $282.59 per share

    Step-by-step explanation:

    Given that,

    Stockholders’ equity = $323 million

    price/earnings ratio = 14

    shares outstanding = 8,800,000

    Market/book ratio =7.7

    Book Value per share:

    = Stockholders’ equity ÷ shares outstanding

    = $323,000,000 ÷ 8,800,000

    = $36.70

    Market price per share:

    = Book Value per share × Market/book ratio

    = $36.70 × 7.7

    = $282.59 per share

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