26 434
Assignments Done
Successfully Done
In April 2015
Your physics homework can be a real challenge, and the due date can be really close - feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.
Our experts will gladly share their knowledge and help you with programming homework. Keep up with the world's newest programming trends.
Get a free quote.
Check the website
for updates.
Receive your completed assignment.
Easy as ABC!
Just provide us with clear instructions and wait for the completed assignment.

Answer on Economics of Enterprise Question for Lamarcus Streeter

Question #5968

Which of the following statements is CORRECT?

a. Typically, a firm’s DPS should exceed its EPS.
b. Typically, a firm’s EBIT should exceed its EBITDA.
c. If a firm is more profitable than average (e.g., Google), we would normally expect to see its stock price exceed its book value per share.
d. If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation.
e. The more depreciation a firm has in a given year, the higher its EPS, other things held constant.

Expert's answer

c. If a firm is more profitable than average (e.g., Google), we would normally expect
to see its stock price exceed its book value per share.

For the most part the book value really doesn't tell us a whole lot. Cory's Tequila Co.
is trading at over $100 and the BV is only $3.57? What is up with that? Well BV
is considered to be the accounting value of each share, drastically different
than what the market is valuing the stock at. And the truth is that market and
book value have nothing in common. Market value is what the investment
community's expectations are and book value is based on costs and retained
earnings. One situation where BV can be useful is if the market value is trading
below the book value, this rarely happens, but if it does it could mean that the
company is undervalued and might be an attractive buy.


No comments

Leave a comment

Related Questions

Link to us

Share with friends

free questions
Questions and Answers
approved by clients
I was extremely pleased with how quickly I received my 'order_num' => answered. The whole process was handled in a professional manner. I really liked how easy it was for me to keep track of my order as I was notified via email whenever the orders status changed. And top marks for the online chat service that you have as it quickly clarified any questions that I had about my order and services that you provide. Thanks again for your help and service.
Vidura on September 2014
solving policy
solving policy
Pay us safely via PayPalPayPal
We deliver professional assignment and homework help for students in USA, UK, Canada, Australia, AE and all over the world.
Terms and Conditions | Privacy Policy | Service
© 2015 BrainRouter LTD. All rights reserved.