Greene, Inc.'s balance sheet indicates that the book value of stockholders' equity (book value per share×total shares outstanding) is $750,800. The firm's earnings per share are $3.24, which produces a price-earnings ratio of 12.32. If there are 49,000 shares of common stock outstanding, what is the firm's market-to-book ratio (i.e., the ratio of price per share to book value per share)? What does the market-to-book ratio tell us?
Greene, Inc.'s balance sheet indicates that the book value of stockholders' equity (book value per share×total shares outstanding) is $750,800. The firm's earnings per share are $3.24, which produces a price-earnings ratio of 12.32. If there are 49,000 shares of common stock outstanding, what is the firm's market-to-book ratio (i.e., the ratio of price per share to book value per share)? What does the market-to-book ratio tell us?
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 6CE
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Greene, Inc.'s balance sheet indicates that the book value of stockholders' equity (book value per
share×total
shares outstanding) is
$750,800.
The firm's earnings per share are
$3.24,
which produces a price-earnings ratio of
12.32.
If there are
49,000
shares of common stock outstanding, what is the firm's market-to-book ratio (i.e., the ratio of price per share to book value per share)? What does the market-to-book ratio tell us?Expert Solution
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