You are considering an investment in Roxie\'s Bed & Breakfast Corp. During the l

Question

You are considering an investment in Roxie's Bed & Breakfast Corp. During the last year, the firm's income statement listed an addition to retained earnings of $11.40 million and common stock dividends of $2.10 million. Roxie's year-end balance sheet shows common stockholders' equity of $47.1 million with 11 million shares of common stock outstanding. The common stock's market price per share was $8.90.

What is Roxie's Bed & Breakfast's book value per share? (Round your answer to 2 decimal places.)

What is Roxie's Bed & Breakfast's earnings per share? (Round your answer to 2 decimal places.)

What is Roxie's Bed & Breakfast's book value per share? (Round your answer to 2 decimal places.)

Explanation / Answer

What is Roxie's Bed & Breakfast's book value per share? (Round your answer to 2 decimal places.)

Book value per share = COmmon Equity/No of shares outstanding

= 47.1M/11M = $4.28

What is Roxie's Bed & Breakfast's earnings per share? (Round your answer to 2 decimal places.)

Earnings per share = Net Income/No of shares outstanding

= (11.40M+2.10M)/11M = $1.23

Calculate the market-to-book ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Market-to-book ratio = Mkt Value pe share/Book valyue oer share

= 8.90/4.28 = 2.08 times

Calculate the price-earnings ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price-earnings ratio = Price per share/EPS = 8.90/1.23 = 7.24 times

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.