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4-9 M/B AND SHARE PRICE You are given the following information: Stockholders' equity $3.75 billion, price/earnings ratio 3.5, common shares outstanding 50 million, and market/book

4-9

M/B AND SHARE PRICE You are given the following information: Stockholders' equity $3.75 billion, price/earnings ratio 3.5, common shares outstanding 50 million, and market/book ratio 1.9. Calculate the price of a share of the company's common stock.

4-10

RATIO CALCULATIONS Assume the following relationships for the Brauer Corp.: Sales total assets 1.5 Return on assets (ROA) 3% Return on equity (ROE) 5% Calculate Brauer's profit margin and debt ratio.

4-11

RATIO CALCULATIONS Graser Trucking has $12 billion in assets, and its tax rate is 40%. Its basic earning power (BEP) ratio is 15%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio? 112 Part 2 Fundamental Concepts in Financial Management

4-12

TIE RATIO The H.R. Pickett Corp. has $500,000 of debt outstanding, and it pays an annual interest rate of 10%. Its annual sales are $2 million, its average tax rate is 30%, and its net profit margin is 5%. What is its TIE ratio?

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