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16 November, 05:43

Wilson, Inc., has a current stock price of $44.50. For the past year, the company had net income of $6,400,000, total equity of $21,610,000, sales of $39,300,000, and 4.4 million shares of stock outstanding.

A) What are earnings per share (EPS) ?

B) What is the price earnings ratio?

C) What is the price sales ratio?

D) What is the book value per share?

E) What is the market-to-book ratio?

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Answers (1)
  1. 16 November, 07:35
    0
    The computations are shown below:

    A. Earning per share

    = Net income : number of shares outstanding

    = $6,400,000 : 4,400,000 shares

    = $1.45

    B. Price earnings ratio

    = Current stock price : Earning per share

    = $44.50 : $1.45

    = 30.69

    C. Prices sales ratio

    Price sales ratio = (Market price per share) : (Total sales per share)

    where,

    Total sales per share = (Total sales) : (Number of shares)

    = $39,300,000 : 4,400,000 shares

    = 8.93

    So, the price sales ratio = $44.50 : $8.93

    = 4.98 times

    D. Book value per share

    = Book value : number of shares outstanding

    = $21,610,000 : 4,400,000 shares

    = $4.91

    E. Market-to-book ratio

    Market to book ratio = (Market price per share) : (book value per share)

    = $44.50 : $4.91

    = 9.06
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Home » Business » Wilson, Inc., has a current stock price of $44.50. For the past year, the company had net income of $6,400,000, total equity of $21,610,000, sales of $39,300,000, and 4.4 million shares of stock outstanding.
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