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Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Please help with this question from 4-4.

Transcribed Image Text:b. Compute the firm's operating profit margin.
c. What was the times interest earned?
4-4. (Price/book) Chang, Inc.'s balance sheet shows a stockholders' equity book value (total
common equity) of $750,500. The firm's earnings per share were $3, resulting in a price/
earnings ratio of 12.25X. There are 50,000 shares of common stock outstanding. What is
the price/book ratio? What does this indicate about how shareholders view Chang, Inc.?
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