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Vitek1552 [10]
3 years ago
9

Market Value Ratios Val's Volleyball Supply's market-to-book ratio is currently 3.29 times and PE ratio is 5.49 times. If Val's

Volleyball Supply's common stock is currently selling at $9.70 per share, what is the book value per share and earnings per share? (Round your answer to 2 decimal places.)
Business
1 answer:
olga2289 [7]3 years ago
4 0

Answer:

Book Value of Share is $2.9

Earning Per share is $1.8

Explanation:

Market to book value ratio is the measure to calculate the time the market value of a share is as compared to book value of that share.

Market to book value = Market value / Book value

3.29 = $9.7 / Book value

Book Value = $9.7 / 3.29

Book value = $2.9

Price earning ratio is the ratio the compare the market price of a share with earning associated with that share.

Price earning Ratio = Price of share / Earning per share

5.49 = $9.7 / Earning per share

Earning Per share = $9.7 / 5.49 = $1.8

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Answer and Explanation:

Arguments for U.S. Company offshoring:

1. Cost savings:

Companies usually offshore manufacturing or services to developing countries where wages are low, thus resulting in cost savings. These savings are passed on to the customers, shareholders and managers of these companies.

2. Skills:

The competitive advantage of nations often means that some countries or regions develop a much better ecosystem for certain types of industries. This means there is better availability of skilled human resources in that region for specific types of tasks. For example, India and the Philippines have a large pool of English-speaking, college educated youth; as well as a mature training infrastructure; that makes it ideal for business process outsourcing. Therefore, many companies choose to offshore certain business functions (e.g. call centers for customer support) to these locations.

Arguments for U.S. Company offshoring:

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While companies can set quality standards for work performed by foreign employees, language and cultural barriers, as well as overseas supply chains, can present barriers to quality control. Products made overseas can be flawed because of out-of-date or worn equipment in overseas factories, or substandard raw materials. In 2000, for example, Masterlock had to recall more than 750,000 locks made in China. Worn dies at the Chinese factory produced locks that could be pulled apart without a key.

2. Public Image:

In times of high unemployment in the United States, sending jobs out of the country can hurt a company’s public image. Fewer regulations in other countries can make it less expensive for American factories to operate, but environmental damage and labor abuses that make the news can tarnish the image of companies involved there. Consumers have organized boycotts against companies that use child labor or sweatshops to produce clothing and shoes. In response, companies such as Nike, Dell and Gap have established codes of conduct for their suppliers.

8 0
3 years ago
You are a management consultant for a 30-year old partner in a large law firm. In a meeting, your client says: "According to an
shtirl [24]

Answer:

Please see attachment

Explanation:

Please see attachment

4 0
3 years ago
Ivanhoe Company reports the following operating results for the month of August: sales $392,000 (units 4,900), variable costs $2
Norma-Jean [14]

Answer:

The best course of action is to increase the selling price by 10%.

Explanation:

Giving the following information:

sales $392,000 (units 4,900)

variable costs (247,000)

fixed costs (96,000)

Current net income= 49,000

<u>First, we need to calculate the unitary selling price and variable cost:</u>

Selling price= 392,000 / 4,900= $80

Unitary variable cost= 247,000 / 4,900= $50.41

<u>Now, we will calculate the impact on net income of each variation:</u>

Increasing selling price by 10%:

Selling price= 80*1.1= $88

Effect on income= 8*4,900= $39,200 increase

<u>Reduce variable costs to 57% of sales.</u>

Unitary variable cost= 80*0.57= $45.6

Effect on income= (50.41 - 45.6)*4,900= $23,569 increase

<u>Reduce fixed costs by $22,000.</u>

Effect on income= $22,000 increase

6 0
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The net income of Steinbach &amp; Sons, a landscaping company, decreased sharply during 2016. Mort Steinbach, owner and manager
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Please be specific seems like too long
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Other things held constant, an increase in financial leverage will decrease a for-profit business’s market risk as measured by i
vaieri [72.5K]

Answer:

False because if the financial leverage is growing then the Financial risk will start growing and this increase in the financial risk will increase the beta. Furthermore this increase in financial leverage is also responsible for the increase in the Bankruptcy Risk.

Remember the beta factor is directly proportional to market risk (Systematic Risk) this means if the market risk is increasing then the beta will also increase and if the market risk is decreasing then the beta is decreasing. This is evident from the fact that people require more returns from their investments in Asia than USA. The reason is that the Market risk in Asian countries is more than United states of America.

8 0
3 years ago
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