The balance sheet and income statement shown below are for Pettijohn Inc. Note t

Question

The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over Balance Sheet (Millions of Assets Cash and securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets 2016 $1,554.0 9,660.0 13,440.0 $24,654.0 17,346.0 $42,000.0 Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities Long-term bonds Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity $7,980.0 5,880.0 4,620.0 $18,480.0 10,920.0 $29,400.0 3,360.0 9,240.0 $12,600.0 $42,000.0

Explanation / Answer

Answer:b.1.08

Book Value = Common Stock + Retained Earnings = $3360m + $9240m = $12600m

Book Value per share = $1260m / 175m = 72

Market price = $77.69

Market to Book ratio = $77.69/72 = 1.08

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