The Holtzman Corporation has assets of $384,000, current liabilities of $54,000, and long-term liabilities of $79,000. There is $36,800 in preferred stock outstanding; 20,000 shares of common stock have been issued.

a. Compute book value (net worth) per share. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Book value per share $

b. If there is $33,600 in earnings available to common stockholders, and Holtzman’s stock has a P/E of 22 times earnings per share, what is the current price of the stock? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Current price $

c. What is the ratio of market value per share to book value per share? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Respuesta :

Answer:

A. $10.71

B.$36.96

C. 3.45 times

Explanation:

The Holtzman Corporation

A.

Total assets $384,000

Less:current liabilities ($54,000)

long-term liabilities of ($79,000)

Stock holder equity $251,000

Less preferred stock( $36,800)

Net worth assigned to common $214,200

Common shares outstanding $20,000

Book value per share (Net worth) per share $10.71

Book value per share = $214,200/$20,000

= $10.71

B. Earnings per share = Earnings available to common stockholders /Numbers of shares

$33,600/$20,000

=$1.68

Price =P/E×EPS

22×$1.68

=$36.96

C. Market value per share to book value per share

$36.96/$10.71

3.45 times