a. What is the firm’s current book value per share? (please show work using the
ID: 2718243 • Letter: A
Question
a. What is the firm’s current book value per share? (please show work using the formulas)
b. What is the firm’s current P/E ratio? (please show work using the formulas)
Data item
2015 value
Earnings per share (EPS)
$8.26
Price per share of common stock
$104.25
Book value of common stock equity
$325,000,000
Total common shares outstanding
8,300,000
Common stock dividend per share
$4.05
Data Points
Beta, b
Required Return, K
0
2.25%
.25
4.600%
.5
6.950%
.75
9.300%
1
11.650%
1.25
14.000%
1.5
16.350%
1.75
18.700%
2.0
21.050%
Data item
2015 value
Earnings per share (EPS)
$8.26
Price per share of common stock
$104.25
Book value of common stock equity
$325,000,000
Total common shares outstanding
8,300,000
Common stock dividend per share
$4.05
Data Points
Beta, b
Required Return, K
0
2.25%
.25
4.600%
.5
6.950%
.75
9.300%
1
11.650%
1.25
14.000%
1.5
16.350%
1.75
18.700%
2.0
21.050%
Explanation / Answer
a. What is the firm’s current book value per share? (please show work using the
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