a. What is the firm’s current book value per share? (please show work using the

Question

a. What is the firm’s current book value per share? (please show work using the formulas)

b. What is the firm’s current P/E ratio? (please show work using the formulas)

Data item

2015 value

Earnings per share (EPS)

$8.26

Price per share of common stock

$104.25

Book value of common stock equity

$325,000,000

Total common shares outstanding

8,300,000

Common stock dividend per share

$4.05

Data Points

Beta, b

Required Return, K

0

2.25%

.25

4.600%

.5

6.950%

.75

9.300%

1

11.650%

1.25

14.000%

1.5

16.350%

1.75

18.700%

2.0

21.050%

Data item

2015 value

Earnings per share (EPS)

$8.26

Price per share of common stock

$104.25

Book value of common stock equity

$325,000,000

Total common shares outstanding

8,300,000

Common stock dividend per share

$4.05

Data Points

Beta, b

Required Return, K

0

2.25%

.25

4.600%

.5

6.950%

.75

9.300%

1

11.650%

1.25

14.000%

1.5

16.350%

1.75

18.700%

2.0

21.050%

Explanation / Answer

a. What is the firm’s current book value per share? (please show work using the

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