Problemon january1 the company has total assets of 8600, Ask an Expert

Accounting

Problem:

On January1, the company has Total assets of $8,600 financed by Debt of $4,700 and Stockholders' equity of $3,900; for 120 common shares outstanding, the equity price-to-book ratio is 0.77. During the subsequent year the company does not issue new shares. They also expect an asset turnover ratio of 2.7; a 4.80% net profit margin; and a 60% payout ratio.

Required:

Question: If the year-end equity price-to-book ratio were 0.83, what year-end shareprice is forecast?

A. $33.07

B. $44.01

C. $30.06

D. $36.37

E. $40.01

Note: Please show basic calculation

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167411

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