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1 July, 11:13

Bree's Tennis Supply's market-to-book ratio is currently 9.4 times and PE ratio is 20 times. If Bree's Tennis Supply's common stock is currently selling at $20.50 per share, what is the book value per share and earnings per share?

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  1. 1 July, 13:36
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    The book value per share and earnings per share is $2.1809 and $1.025 respectively.

    Explanation:

    For computing the book value per share, we have to used the market to book ratio formula which is shown below:

    Market to book ratio = Market price per share : book value per share

    9.4 times = $20.50 : book value per share

    So, book value per share = $20.50 : 9.4 times

    = $2.1809

    Now, the earning per share is calculated by using a PE ratio which is displayed below:

    PE ratio = Share price : Earning per share

    20 times = $20.50 : Earning per share

    So, earning per share = $20.50 : 20 times

    = $1.025

    Hence, the book value per share and earnings per share is $2.1809 and $1.025 respectively.
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Home » Business » Bree's Tennis Supply's market-to-book ratio is currently 9.4 times and PE ratio is 20 times. If Bree's Tennis Supply's common stock is currently selling at $20.50 per share, what is the book value per share and earnings per share?
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