A firm has a P/E ratio of 15 and a stock price of $35 per share. If their profit margin is 10% and 1 million shares of stock are outstanding, what is their Price to Sales ratio? A. 0.667 B. 2.33 C. 1.5 D. 3.5

A firm has a P/E ratio of 15 and a stock price of $35 per share. If their profit margin is 10% and 1 million shares of stock are outstanding, what is their Price to Sales ratio? A. 0.667 B. 2.33 C. 1.5 D. 3.5

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter14: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 1DTM

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

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A firm has a P/E ratio of 15 and a stock price of $35 per share. If their profit margin is 10% and 1 million shares of stock are outstanding, what is their Price to Sales
ratio?
A. 0.667
B. 2.33
C. 1.5
D. 3.5
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