Assume the following financial data:

a$.$ Compute the $\frac{P}{E}$ ratio $($stock price to earnings per share$).$

b$.$ Compute the book value per share $($note that book value equals stock$-$

holders' equity$).$

c$.$ Compute the ratio of stock price to book value per share.

d$.$ Compute the dividend yield.

e$.$ Compute the payout ratio.

Referring to problem $13$:

a$.$ Compute after$-$tax return on equity.

b$.$ If the tax rate were $40$ percent, what could you infer the value of before$-$tax

income was?

c$.$ Now assume the same before$-$tax income computed in part $b,$ but a tax rate

of $25$ percent; recompute after$-$tax return on equity $($using the simplifying

assumption that equity remains constant$).$

d$.$ Assume the taxes in part $c$ were reduced largely as a result of one$-$time

nonrecurring tax credits. Would you expect the stock value to go up sub$-$

stantially as a result of the higher return on equity?