User Account

All Pages

Statements is true about market value ratios

Assignment Help Macroeconomics
Reference no: EM131502917

Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $9,750,000, and a current stock price of $14.74 per share. The company is forcasting an increase of 25% of its after-tax income next year, but it also expects it will have to issue 2,900,000 new stock (raising its shares outstanding from 5,500,00 to 8,400,000).

1) If Green Caterpillar's forceast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round an P/E ratio calculation to four decimal places).

a. $12.08 per share

b. $14.75 per share

c. $9.06 per share

d. $15.10 per share

2) One year later, Green Caterpilla's shares are trading at $48.36 per share, and the company reports the value of its total common equity as $20,294,400. Given this information, Green Caterpillar's market-to-book (M/B) ratio is (48.04x, 19.98x, 1.22x, 29.97x) ________.

3) Can a company's hsare exhibit a negative P/E ratios? (yes or no)

4) Which of the following statements is true about market value ratios?

a) Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

b) High P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

Reference no: EM131502917

Questions Cloud

What is the proportion of debt and equity : What is the proportion of debt and equity? What is the after-tax weighted average cost of capital for Marley's, if it is subject to 35 percent marginal tax rate
Allow the vet students to perform the autopsy : Is it ethical for the doctor to allow the vet students to perform the autopsy? What would you do in this situation? Why?
What is sustainable growth rate : What is the sustainable growth rate? What is the sustainable growth rate?
Calculate the diluted earnings per share : Calculate ABC company Earning per share. Calculate the shares have been purchased with the proceeds from the options
Statements is true about market value ratios : Which of the following statements is true about market value ratios? Can a company's hsare exhibit a negative P/E ratios?
Company decides to invest in the opportunity : Which two statements could be said of this project if the company decides to invest in the opportunity?
Current yield and capital gains yield : If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond D?
How much cash flow would hospital generate from this sale : How much cash flow would the hospital generate from this sale?
Firm might experience due to a cyber-attack : Describe the types of loss that a firm might experience due to a cyber-attack.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Production possibility frontier and opportunity cost

Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced.

  How does monetary policy control the money supply

How does monetary policy control the money supply? How does a stimulus program (through the money multiplier) affect the money supply?

  Why firms are submitting bid to offer their firms services

All of the firms will submit sealed bids. The procurement officer will look at all of the bids and select the lowest bid but pay to the lowest bidder a price equal to the price bid by the second lowest bidder. Show that bidding c is a weakly domin..

  Cross exchange rate between currencies

What was the cross-exchange rate between the Real and the Peso in 2001? Real____/Peso. What was cross-exchage rate between Real and Peso in 2002? Real_____/Peso.

  Where z is marginal utility per dollar spen

Where z is marginal utility per dollar spent, x is the amount spent on product A, and y is the amount spent on product B.

  Find the long run competitive equilibrium firm quantity

a)  Find the long run competitive equilibrium firm quantity, market price and number of firms.  b)  Assume for the moment that we believe this to be a constant cost industry.  Under this assumption, what should we observe as the new long run equili..

  Describe a coasian solution to the externality problem

A paint factory produces paints, but in the process transmits chemicals into the soil below the factory. These chemicals taint the soil such that the farmer whose land abuts the paint factory property experiences a reduction in soil quality and he..

  How competitive industry is trying to maximize profit

Is the following statement correct or incorrect: "If a firm operating in a monopoly or imperfectly competitive industry is trying to maximize profits, it will always charge the highest price that the traffic will bear." Explain why or why not.

  Determine james and martin are in which condition

Assume that James owns a wheat farm that produces an annual crop of 500 bushels. His only choice is to store it in a nearby grain elevator owned by Martin, whose facility will be empty unless James is using it.

  Calculate minimum income to ensure positive utility

Give the utility function U(x, y) = (x-4) 1/2 (y-2)- 1/2 , what is the minimum income needed to ensure positive utility?

  The gdp deflator is the broades

The GDP deflator is the broadest, most inclusive measure of change in the country's price level, since it includes all final goods and services produced and sold. But the GDP deflator is not used by the government or economists as the benchmark measu..

  Learned in ethical hacking

Please submit a 3-5 page paper outlining what you have learned in ethical hacking,  specific threats that face an organization from someone using the tools you've been exposed to, and the countermeasures you would implement to prevent these attack..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd