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Question
The Charleston Company is a relatively small, privately owned firm. Last year the company had after-tax income of $15,000, and 10,000 shares were outstanding. The owners were trying to determine the market value for the stock, prior to taking the company public. A similar firm which is publicly traded had a price/earnings ratio of 5.0. Using only the information given, estimate the market value of one share of Charleston's stock.
a. $10.00
b. $7.50
c. $5.00
d. $2.50
e. $1.50
Answer
This answer is hidden. It contains 60 characters.
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