You are considering an to retained earnings of $9.00 million and common stock di

Question

You are considering an to retained earnings of $9.00 million and common stock dividends of $2.90 milion. Roxie's year-end balance stockholders' equity of $42.7 million with 17 million shares of common stock outstanding. The common stock's market price per share was $9.50. nt in Roxie's Bed & Breakfast Corp. During the last year, the firm's income statement listed an addition What is Roxie's Bed & Breakfast's book value per share? (Round your answer to 2 decimal places) What is Roxie's Bed & Breakfast's earnings per share? (Round your answer to 2 decimal places.) Calculate the market-to-book ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places) ate calculations. Round your answer to 2 decimal places.) Prev : 123of 30 ??? Next >

Explanation / Answer

book value per share = (shareholders equity ) / total outstanding shares in market book value per share = ($42.7 / 17) million book value per share = $2.51 earning per share = (Net Income – Preferred Dividends) / Weighted Average Shares Outstanding earning per share = $9/17 million earning per share = $ 0.53 market to book value ratio= Share Price / Net Book Value per Share market to book value ratio= $ 9.50 / $2.51 market to book value ratio= 3.78 times price earning ratio P/E = Stock Price Per Share / Earnings Per Share price earning ratio P/E = $9.50 / $0.53 price earning ratio P/E = 17.92 times Assumptions - 1 stockholder's equity already includes current year addition to retained earnings (as it shows year end balance ) 2 dividends are already adjusted to current year profits

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