World Wide Web Wares (4W, for short) is an online retailer of small kitchen appliances and utensils. The firm has been around for a few years and has created a nice market niche for itself. Infact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you've decided to take a closer look. You plan to use the price-to-sales ratio to value the stock, and you have collected P/S multiples on the following Internet retailer stocks:

company | P/S multplies

amazing.com | 4.2

Reallycooking.com | 3.7

fixtures and appliances online | 3.6

find the average P/S ratio for these three firms. Given that 4W is expected to generate $47 million in sales next year and will have 5 million shares of stock outstanding, use the average P/S ratio you computed above to put a value on 4W's stock.

Questions: (round to 2 decimal places)

a. The average P/S ratio for the 3 firms is (blank) ?

b. The value of 4W's stock is (blank) ?