Reference no: EM132499957

Use the following information for MDB, Inc. for this problem. MSB Inc. Assets Current assets

Cash 10,020

Accounts receivable 9,200

Inventory 15,500

Total 34,720

Fixed assets Net plant and equipment 50,164

Total assets 84,884

Liabilities and owners' equity Current liabilities Accounts payable 8,400

Notes payable 5,600 Total 14,000

Long-term debt 20,000

Owners' equity Common stock and paid-in surplus 31,500

Accumulated retained earnings 19,384

Total 50,884

Total liabilities and owners' equity 84,884

Income statement Sales 62,000 -

Cost of goods sold 23,200

Gross Margin 38,800 -

SG&A 18,000 -

Depreciation 3,600

EBIT 17,200 -

Interest paid 2,000

Taxable income 15,200

Taxes 30% 4,560

Net income 10,640

Dividends 40% 4,256

Retained earnings 60% 6,384

Shares of stock outstanding 12,000

Market price per share 26

Question 1: What is the equity multiplier and price to earnings (PE) ratio?

A. 1.606, 25.23

B. 1.688, 32.99

C. 1.595, 27.99

D. 1.635, 37.27

E. 1.668, 29.32

F. 1.703, 42.70