4. Market value ratios Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements Consider the case of Cute Camel Woodcret Company Cute Camel Woodcraft Company Just reported earnings after tax (also called net income) of $3,250,000 and a current stock price of $39.50 per share. The company is forecasting an increase of 25% for its after tax income next yeat, but it also expects it will have to issue 3,000,000 new shores of stock raising its shares outstanding from 5,500,000 to 8,500,000). of Cute Camel's forecast turns out to be correct and its price/earings (PVC) rate does not change, what does the company's management expects stock price to be one year from now? (Round any P/E ratio calculation to four decimal places) O $31.98 per share $39.50 per share $23.99 per share $39.98 per share One year later, Cute Camer's shares are trading at $55 80 per share, and the company reports the value of its total como equity as $54,366,000 Given this information, Cute Camer's market-to-book (M/B) ratio is Can a company's shares exhibit a negative P/E ratio? $39.98 per share One year later, Cute Camels shares are trading at $55.00 per share, and the company reports the value of its total common equity as 454,246,000. Given this information, Cute Camer's market to book (M/W) ratio is Can a company's shares exhibit a negative D/E ratio? ONO Yes Which of the following statements is true about market value ratios? companies with high research and development (R&D) expenses tend to have low Pye ratios. Companies with high research and development (R&D) expenses tend to have high P/E ratios Grade It Now Save & Continue Corting without saving