ch 27 Spring 96 #37
Shenaz_Keshwani@mercer.com
Wed, 21 Apr 1999 09:45:48 -0500
Given for XYZ Company:
Net Income ($000): 10,000
Total book assets ($000): 320,000
Total book debt ($000): 0
Shares outstanding (000): 3,000
Share price 100
Expected dividends ($000): 3,000
Calculate P/E and Market to Book ratio
Question I have is what happens when we have debt and interest and
taxes to consider. How does this change the calculation of earnings
and book equity.
For example: (I am putting some numbers in $000 below)
Debt: 100,000
Interest: 10,000
Tax: 50,000
How would I calculate earnings and book equity
Thank you.
Shenaz