The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per sharetotal shares outstanding) of $1,340,000. Furthermore, the firm's income statement for the year just ended has a net income of $555,000, which is $0.270 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 19.38.

a. What price would you expect Underwood Motors shares to sell for?

b. What is the book value per share for Underwood's shares?