TwitterMe Inc is a new company and currently has negative ea

TwitterMe, Inc, is a new company and currently has negative earnings. The company\'s sales are $1.2 milion and there are 130,000 shares outstanding If the benchmark price-sales ratio is 5.2, what is your estimate of an ap round intermediate calculations.) propriate stock price? (Do not Stock price What if the price-sales ratio were 4.6? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16) Stock price

Solution

a. Stock Price $    48.00 Working: Step-1:Calculation of Total share price Total value of shares = Total Sales x price-sales ratio =        12,00,000 x 5.2 =        62,40,000 Share price =        62,40,000 /        1,30,000 = 48.00 b. Stock Price $    42.46 Working: Step-1:Calculation of Total share price Total value of shares = Total Sales x price-sales ratio =        12,00,000 x 4.6 =        55,20,000 Share price =        55,20,000 /        1,30,000 = 42.46