Ask Question
14 May, 11:18

Twitterme, inc., is a new company and currently has negative earnings. the company's sales are $2,300,000 and there are 170,000 shares outstanding. if the benchmark price-sales ratio for the company is 4.4, 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.) current stock price $ if the benchmark price-sales ratio for the company is 3.8, 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.) current stock price $

+3
Answers (1)
  1. 14 May, 11:38
    0
    Given:

    company's sales are $2,300,000

    170,000 shares outstanding.

    if the benchmark price-sales ratio for the company is 4.4, how much will you pay for the stock?

    if the benchmark price-sales ratio for the company is 3.8, how much will you pay for the stock?

    Sales per share = Sales / Shares outstanding

    Sales per share = 2,300,000 / 170,000

    Sales per share = 13.529 or 13.53

    Price per share with PS ratio

    P = Benchmark PS ratio * Sales per share

    P = 4.4 * 13.53

    P = $59.53

    P = 3.8 * 13.53

    P = $51.41

    If the PS ratio of the company is 4.4, I'll pay $59.53 per share.

    If the PS ratio of the company is 3.8, I'll pay $51.41 per share.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Twitterme, inc., is a new company and currently has negative earnings. the company's sales are $2,300,000 and there are 170,000 shares ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers