Amigo Software, Inc. Total Assets $800,000 Current Liabilities $150,000 Long-ter

Question

Amigo Software, Inc.
Total Assets $800,000
Current Liabilities $150,000
Long-term Liabilities $120,000
Preffered Stock Obligation $65,000
# of common stock outstanding 30,000
Earnings available to common $48,000
P/E Ratio 20


Total Assets______
Current Liabilities ______
Long-term Liabilities ________
Stockholders' Equity _______
Preffered Stock Obligation_______
Net Worth assigned to common________
# of common outstanding _______
Book Value per share _________

b) Earnings avilable to common
# of common outstanding _______
Earnings per share
P/E Ratio _________
Price of share ________

c) Market to book value per share_________

Explanation / Answer

Book value per share is (Assets minus liabilities- preferred)/common shares outstanding). 800,000-150,000-120,000-65,000= 465,000/30,000= $15.50 per share. Earnings available to common /common outstanding = earnings per share 48,000/30,000= $1.60 per share P/E ratio given at 20 So stock price = EPS* P/E ratio 1.60*20= $32 per share. Market to book value would be $32/$15.50= 2.06.

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