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Sagot :
The market price per share of stock is $45.00
What is the market price per share of stock?
The market price per share of stock for Windswept, incorporated can be determined based on its price-earnings ratio and the earnings per share since the price-earnings means the market price divided by earnings per share
price-earnings ratio= market price per share of stock/earnings per share
price-earnings ratio=15
market price per share of stock=unknown(assume is MP)
earnings per share=net income/stock outstanding
net income=$751 million
stock outstanding=250 million
earnings per share=$751 million/250 million
earnings per share=$3.00
15=MP/$3.00
MP=15*$3.00
MP=market price per share of stock=$45.00
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Full question:
Use the following information to answer this question.
Windswept, Inc. 2021 Income Statement
($ in millions)
Net sales $ 8,750
Cost of goods sold 7,300
Depreciation 305
Earnings before interest and taxes $ 1,145
Interest paid 72
Taxable income $ 1,073
Taxes 322
Net income $ 751
Windswept, Inc. 2016 and 2017 Balance Sheets
($ in millions)
2016 2017
Cash $ 150 $ 165
Accounts payable $ 1,190 $ 1,367
Accounts rec. 920 730
Long-term debt 950 1,128
Inventory 1,520 1,530 Common stock 3,210 2,900
Total $ 2,590 $ 2,425 Retained earnings 460 710
Net fixed assets 3,220 3,680
Total assets $ 5,810 $ 6,105 Total liab. & equity $ 5,810 $ 6,105
Windswept, Inc., has 250 million shares of stock outstanding. Its price-earnings ratio for 2021 is 15. What is the market price per share of stock?
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