Rossdale, Inc., had additions to retained earnings for the year just ended of $6
ID: 2465297 • Letter: R
Question
Rossdale, Inc., had additions to retained earnings for the year just ended of $629,000. The firm paid out $110,000 in cash dividends, and it has ending total equity of $7.24 million.
If the stock currently sells for $29.40 per share, what is the market-to-book ratio? The price-earnings ratio? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
If total sales were $10.54 million, what is the price-sales ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Requirement 2:If the stock currently sells for $29.40 per share, what is the market-to-book ratio? The price-earnings ratio? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Explanation / Answer
1.
Total earnings before dividend:
retained earnings $629000
add cash dividends $110000
Total earnings $739000 , earning per share = 739000/ 724000 = 1.0207
book value per share = total equity + retained earnings /no. ofequity shares, assume that face value is $10
it shalll be = (7240000 + 629000) / 724000 = $10.86
1. market-to-book ratio = Share price / BVPS
= 29.40/10.86= 2.71 times
2. Price earning ratio = market price per share/ earning price per share
= 29.40/1.0207
=28.80 times
2.
price sales ratio =( market priceper share x no. of shares )/ tota sales
= (29.40 x 724000)/ 10540000
=2.02
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.