Ask Question
20 November, 06:09

13) Baxter & Baxter has total assets of $710,000. There are 45,000 shares of stock outstanding with a market value of $28 a share. The firm has a net profit margin of 7.1 percent and a total asset turnover of 1.29. What is the price-earnings ratio?

+5
Answers (1)
  1. 20 November, 07:47
    0
    19.38

    Explanation:

    Baxter & Baxter

    Market value share / Percentage of profit margin * (Total assets * Total asset turnover) / Outstanding shares

    Where:

    Market value shares=28

    Percentage of profit margin = 71%

    Total assets = 710,000

    Total asset turnover=1.29

    Outstanding shares = 45,000

    Hence:

    Price-earnings ratio =

    $28/[0.071 * ($710,000 * 1.29) ]/45,000

    =19.38
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “13) Baxter & Baxter has total assets of $710,000. There are 45,000 shares of stock outstanding with a market value of $28 a share. The firm ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers