Question details

BUSN380 Week 4 TCO 4 Problem Set 4 - Calculating Yields, Bond & Book Values, Earnings Per Share
$ 15.00

      Assuming that a share of Bozo Oil’s common stock has a market value of $40, what is the firm’s price-earnings ratio? (p. 457)

Ans.

P/E Ratio = Market Value ÷ Earnings per Share

$40 ÷ 2.67 = 14.98 P/E Ratio = 15

           

c.   Calculate the book value of a share of Bozo Oil’s common stock. (p. 461)

Ans.   

Book Value = Assets – Liabilities ÷ No. of Shares

$9,000,000 - $5,000,000 ÷ 750,000 = $5.33

      

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