Taggart Goods Corp. just reported a net income of $$5,000,000,$ and its current stock price is $$39\mathrm{.}50$ per share. Taggart is forecasting an increase of $25\%$ for its net income next year, but it also expects it will have to issue $3,000,000$ new shares of stock $($raising its shares outstanding from $5,500,000$ shares to $8,500,000$ shares$).$

If Taggart's forecast turns out to be correct and its price$-$to$-$earnings $($P$/$E$)$ ratio does not change, what does management expect its stock price to be one year from now?

$$32\mathrm{.}12$ per share

$$39\mathrm{.}50$ per share

$$24\mathrm{.}09$ per share

$$40\mathrm{.}15$ per share

One year later, Taggart Goods Corp.$\text{'}$s stock is trading at $$39\mathrm{.}50,$ and the company reports its common equity value as $$54,604,000.$ What is Taggart Goods Corp.$\text{'}$s market$-$to$-$book $($M$/$B$)$ ratio?

Can a company's stock have a negative $\frac{P}{E}$ ratio?