Smolira Golf Corp. has 20,000 shares of common stock outstanding, and the market

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 $27.

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.)

Explanation / Answer

Earnings/share = (Net Income - Preferred Dividend)/No of Shares = (43094-0)/20000 = 2.15
Price/Earnings ratio = Price per share/earnings per share = 27/2.15 = 12.56
Dividend per share = Dividends / No of shares = 23,000/20000= 1.15
Book value/Share = Owner's equity/ no of shares = 269,906/20000= 13.49
Market to Book Value = Price/share to book value per share = 27/13.49 = 2
PEG ratio = P/E/Growth = 12.56/10%= 125.6

Best of Luckl.God Bless

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