Purchase Solution

# Amigo Software

Not what you're looking for?

Amigo Software, Inc has total assets of \$800,000 current liabilities of \$150,000, and long-term liabilities of \$120,000. There is \$65,000 in preferred stock outstanding. Thirty thousand shares of common stock have been issued.

a) Compare book value (net worth) per share

b) If there is \$48,000 in earnings available to common stockholders and the firm's stock has a P/E of 20 times earnings per share, what is the current price of the stock?

c) What is the ratio of market value per share to book value per share? (Round to two places to the right of the decimal point)

d) If the firm sells at 2.5 times book value per share, what will the P/E ratio be? (Round to the nearest whole number)

##### Solution Summary

This solution is comprised of a detailed explanation to compare book value (net worth) per share, compute what is the current price of the stock, the ratio of market value per share to book value per share, and the P/E ratio.

##### Solution Preview

Amigo Software, Inc has total assets of \$800,000 current liabilities of \$150,000, and long-term liabilities of \$120,000. There is \$65,000 in preferred stock outstanding. Thirty thousand shares of common stock have been issued.

a) Compare book value (net worth) per share

Total Assets = Current liabilities + Long-term liabilities + Total Shareholder Equity
800,000 = 150,000 + 120,000 ...

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

##### Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

##### Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

##### Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.