Business, 21.09.2020 14:01 MarishaTucker
Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $9,000,000 and a current stock price of $34.00 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,500,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,000,000).
If Cold Goose’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)
One year later, Cold Goose’s shares are trading at $48.36 per share, and the company reports the value of its total common equity as $46,768,000. Given this information, Cold Goose’s market-to-book (M/B) ratio is ?
Can a company’s shares exhibit a negative P/E ratio?
Which of the following statements is true about market value ratios?
1. Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.
2. High P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.
Answers: 1
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Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $9,000,000...
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