TwitterMe, Inc., is a new company and currently has negative earnings. The company sales are $1,400,000 and there are 140,000 shares outstanding.
Requirement 1:
If the benchmark price-sales ratio for the company is 5.4, how much will you pay for the stock?
Requirement 2:
If the benchmark price-sales ratio for the company is 4.8, how much will you pay for the stock?