Rabos are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market-based 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 statemerits. Consider the case of Cute Camel Woodcraft Company: Cute Camel Woodcraft Company just reported eamings after tax (also called net income) of $8,500,000, and a current stock price of $28.50 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,000,000 new shares of stock (reising its shares outstanding from 5,500,000 to 7,500,000). If Cute Camel's forecast tums out to be correct and its price-to-eamings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Noter Round intermediate calculations to four decimal places. Round the expected stock price to two decimal places.) $26.12 per share $28 per share $19.59 per share $32.65 per share One year later, Cube Camel's shares are trading at 552.08 per share, and the company reports the value of its total common equity as $39,180,000. Given this information, Qute Camel's markat-to-book (M/B) rabo is - (Note: Do not round intermediate calculations.) Can a company's shares extibit a negative P/E rabo? Yes No Which of the following staterments is true about market value ratios? High P/E ratios could mean that the company has a great deal of uncertainty in its future earmings. Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings