Smolira Golf Corp. has 30,000 shares of common stock outstanding, and the market
ID: 2765299 • Letter: S
Question
Smolira Golf Corp. has 30,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2015 was $39.
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.)
Some recent financial statements for Smolira Golf Corp. follow.
Explanation / Answer
Price earning ratio = Market vakue per share / earning per share earning per share = Net income / Common shares outstanding = 33674 / 30000 = 1.1225 Price earning ratio = 39 / 1.1225 = 34.74 Dividends per share = Total Dividend / Number of shares = 21000 / 30000 = 0.70 Market to Book ratio = Market price / Book value Book value = Owners equity / Number of shares = ( 60000 + 222000) / 30000 = 282000/30000 = 9.4 Market to Book ratio = 39 / 9.4 = 4.15 PEG Ratio = PE Ratio / Annual earnings per share growth = 34.74 / 10 = 3.474
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