Smolira Golf Corp. has 20,000 shares of common stock outstanding, and the market

Question

Smolira Golf Corp. has 20,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2015 was $27.

What is the price-earnings ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

What is the market-to-book ratio at the end of 2015? (Round your answer to 2 decimal places, e.g., 32.16.)

If the company’s growth rate is 10 percent, what is the PEG ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Solution 1.Price-earnings Ratio= Market Value per share/ Earning per share EPS=Eaning/no of shares 23000/20000 1.15 PE Ratio=27/1.15 23.47826 times 2. Dividend per share 23000/20000 $1.15 3.Market to book ratio= current share per price/book value per share Book value per share= total shareholders' equity/ Total no. of o/s share Book value per share 23000+20094/20000 2.15 Market to Book ratio 27/2.15 12.55814 4.PEG RATIO=Price Earning/Annual eps growth 1.15/10% 11.5

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