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Wildcat Corporation recently disclosed the following financial information:
Earnings/revenue- $1,500,000
Assets- $7,000,000
Liabilities- $1,500,000
Shares outstanding- 500,000
Market price- $33.00 per share
Calculate the price-to-book ratio, the price/earnings ratio, and the book value per share for each of the following separate scenarios:
A. Based on current information
B. Earnings fall to $1,000,000
C. Liabilities increase to $2,500,000
D. The company repurchases 20 percent of the outstanding stock, incurring additional liability to finance the purchase.
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