Problem:
Market Value Ratios
You are considering an investment in Rivers Ringtone Corp. During the last year the firm's income statement listed addition to retained earnings = $2.5 million and common stock dividends = $1.2 million. Rivers year-end balance sheet shows common stockholders' equity = $10 million with 2 million shares of common stock outstanding. The common stock's market price per share = $45.00.
Question1: What is Rivers Ringtone Corp' book value per share and earnings per share?
Question 2: Calculate the market-to-book ratio and PE ratio. Explain in detail and also provide all computation and formulas.