Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A group of seven guideline organizations within the same industry as the Dot Corporation had an average Price/Earnings ratio of 12. The Dot Corporation has

A group of seven guideline organizations within the same industry as the Dot Corporation had an average Price/Earnings ratio of 12. The Dot Corporation has $800,000 in cash, paid $180,000 in interest, has debt equal to $3,000,000, and has after-tax earnings of $900,000. Using only this information, what would be a reasonable value for the Dot Corporation?

A $3,700,000

B $6,025,000

C $8,400,000

D $10,800,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Basic Statistics

Authors: Charles Henry Brase, Corrinne Pellillo Brase

6th Edition

978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021

Students also viewed these Accounting questions