Smolira Golf Corp. has 20,000 shares of common stock outstanding, and the market
ID: 2733796 • Letter: S
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 $35.
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 9 percent, what is the PEG ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
Some recent financial statements for Smolira Golf Corp. follow.
Explanation / Answer
Price to earnings ratio = Price / EPS
Price = $35
Earnings per Share = $44104/20000 =2.2052
= P/ E = 35/2.2052 =15.909
Dividends Per Share =22000/20000 =1.1
Market to Book Ratio =
Market ratio = 20000*35= 700000
Book Value =292000 (Total accumalted book value)
= 700000/292000 =2.39
PEG ratio = P/E ratio /Growth =15.909/9 =1.76
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