Question
Reef cinema Corporation has a current market price for its stock of $40 per share. The latest annual report showed net income of $2250000 and
Reef cinema Corporation has a current market price for its stock of $40 per share. The latest annual report showed net income of $2250000 and total common stock equity of $ 15 million. The report also listed 1750000 shares of common stock outstanding. No common stock dividends are paid. A- Calculate Reef cinema's earnings per share (EPS) B- Calculate Reef Cinema's price to earnings (P/E) ratio. C-Calculate Reef Cinema's book value per share. D- What is Calculate Reef to book ratio? E- Based on this information, does the market believe that the future earning power of Calculate Reef Cinema's Corporation justifies a higher value than could be obtained by liquidating the firm? why or why not?
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