Smolira Golf Corp. has 20,000 shares of common stock outstanding, and the market
ID: 2764265 • Letter: S
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 $53.
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-earnings ratio = market price / earnings per share = 53/(36384/20000) = 29.13
Dividend per share = dividend/ number of shares = 26000/20000= $1.30
Market to book ratio = 53/(281000/20000) = 3.77
If the company’s growth rate is 10 percent, what is the PEG ratio = p/E ratio * 1/ annual growth rate in EPS = 29.13/10% = 291.30
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