Problem 410 MyB and Share Price 13 common shares outstanding

Problem 4-10 MyB and Share Price 13 common shares outstanding = 56 million, and market book atio = 1.9 Calculate the price of a share of the company\'s You are given the following information: Stockholders\' equity = $5.5 billion, price earnings ratio common stock. Round your answer to the nearest cent.

Solution

Stockholder\'s Equity = $5.5 Billion
Price To Earnings Ratio = 13
Common Outstanding Shares = 56 Million
Market/Book ratio = 1.9
Price of the share of the company

Book value = $5,500,000,000/$56,000,000 = $98.21.

Market Price/book ratio = 1.9 = x/98.21 so 1.9 x 98.21 = $186.599

Price of share of company\'s common stock = $186.599

The Price to Earnings ratio doesn\'t come into play as earnings were not given.