1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
oee [108]
3 years ago
12

TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $1,500,000 and there are 135,000

shares outstanding.
a. If the benchmark price-sales ratio for the company is 5.5, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. If the benchmark price-sales ratio for the company is 4.9, how much will you pay for the stock?
Business
1 answer:
Masteriza [31]3 years ago
7 0

Answer:

(a) $61.11

(b) $54.44

Explanation:

1)

Value of Stock = Benchmark price-sales ratio × Stock's sales

                          =  5.5 × 1,500,000

                         = $8,250,000

Thus,

Price of stock = Value of Stock ÷ shares outstanding

                       = 8,250,000 ÷ 135,000

                       = $61.11

Thus, I would pay $61.11 for the stock.

2)

Value of Stock = Benchmark price-sales ratio × Stock's sales

                          =  4.9 × 1,500,000

                         = $7,350,000

Thus,

Price of stock = Value of Stock ÷ shares outstanding

                       = $7,350,000 ÷ 135,000

                       = $54.44

Thus, I would pay $54.44 for the stock.

You might be interested in
Compare the world population index for 1960 to the world population index for 2000. then express the world population in 2000 as
kirill115 [55]

The answer is 200%.

If we see the world population index and compare the population in 1960 and 2000, we see that population in 2000 is double than 1960. 

World population in 1960 = 3,007,751

World population in 2000 = <span>6,104,538 which is approximately double than 1960.</span>

So when we express it as percentage multiply 2 with 100 and we get the percentage 200.

 

5 0
3 years ago
What advice or tips does Lauren Haugen have for people who are learning to manage their finances?
Nesterboy [21]

Answer: Save back for if something urgent happens. Put saving in one account and seperate that from your weekly paychecks because saving and paychecks need to be divided apart so you can live on your weekly income and take a little bit out of the main income and put it in the savings due to inflation it is becoming harder to do such a thing

Explanation: Great!

7 0
3 years ago
A firm has a market value equal to its book value. Currently, the firm has excess cash of $900 and other assets of $5,100. Equit
Harrizon [31]

Answer:

$850

Explanation:

Price per share = $6,000 ÷1,000 = $6

Number of shares repurchased = $900 ÷$6 = $150

New number of shares outstanding = $1,000 - $150 = $850

Therefore $850 shares of stock will be outstanding after the stock repurchase is completed

8 0
3 years ago
What are the little crowns for?
Lelechka [254]
Do you have a picture or anything??
3 0
3 years ago
Read 2 more answers
Standlar Company makes wireless speakers. The standard model price is $360 and variable expenses are $210. The deluxe model pric
bija089 [108]

Answer:

The overall Sales revenue at break even is $515995.872

Explanation:

The overall break even in dollars or the composite break even point is the Total revenue that a business must earn from all its products that should be equal to the total costs from all its products and there is no profit or no loss.

The formula for composite or overall break even in dollars is,

Break even in dollars = Fixed costs / Weighted average contribution margin ratio

Where the weighted average contribution margin ratio is the weghtage of each product in the overall sales mix multiplied by the contribution margin of each product.

The total sales mix is = 8 + 4 + 1  = 13

Weighted average contribution margin ratio = ((360 - 210) / 360) * 8/13  +  

((500 - 300) / 500) * 4/13  +  ((1600 - 600) / 1600) * 1/13     =   0.5814 or 58.14%

Break even in dollars = 300000  /  0.5814  

Break even in dollars = $515995.872

If there is some discrepancy in the final answer, it will be due to the rounding off of the weighted average contribution margin ratio

3 0
4 years ago
Other questions:
  • Roles that are concerned specifically with the activities that need to be carried out for the group to accomplish its goals are
    12·1 answer
  • If nomimal GDP is 100,000 and real GDP is 80,000the GDP deflator is 115
    8·1 answer
  • The present value of $200 to be received 10 years from today, assuming an opportunity cost of 10 percent, is
    9·1 answer
  • Which of the following is not included in the computation of the quick ratio? a. Accounts receivable b. Marketable securities c.
    13·1 answer
  • Genna approached Al Ternator about joining the business as an owner. She offered to provide the technical expertise and deal dir
    12·1 answer
  • Concord Company sells merchandise on account for $5700 to Ivanhoe Company with credit terms of 2/10, n/30. Ivanhoe Company retur
    5·1 answer
  • An unfunded pension liability is reported on the balance sheet as a(n) a.current liability or a long-term liability, depending u
    6·1 answer
  • Question + answers in photo, please help!
    8·1 answer
  • PLEASE HELP ASAP!! CORRECT ANSWER ONLY PLEASE!!!
    5·2 answers
  • What is the term for the level of output at which the sales revenue of the firm just covers the fixed and variable costs includi
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!