P7.4 The Amherst Company has net profits of $10 million, sales of $150 million, and 2.5 mil-

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P7.4 The Amherst Company has net profits of $10 million, sales of $150 million, and 2.5 mil- lion shares of common stock outstanding. The company has total assets of $75 million and total stockholders' equity of $45 million. It pays $1 per share in common dividends, and the stock trades at $20 per share. Given this information, determine the following:

a. Amherst's EPS.

b. Amherst's book value per share and price-to-book-value ratio.

c. The firm's P/E ratio.

d. The company's net profit margin.

e. The stock's dividend payout ratio and its dividend yield.

f. The stock's PEG ratio, given that the company's earnings have been growing at an average annual rate of

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Fundamentals Of Investing

ISBN: 9780136117049

11th Edition

Authors: Lawrence J. Gitman, Michael D. Joehnk, Scott B. Smart, Scott J. Smart

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