Question: 1. If a firm has a PIE ratio of 12 and a profit margin on sales of 6 percent, what is its price-to-sales (P/S) ratio likely to be?
2. If a firm is expected to have a profit margin of 8 percent but trades at a price-to sales ratio of 25, what inferences would you make?
3. Should a firm that pays higher dividends have a higher share value?