TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $2,300,000 and there are 170,000 shares outstanding.
Requirement 1:
If the benchmark price-sales ratio for the company is 4.4, how much will you pay for the stock?
Requirement 2:
If the benchmark price-sales ratio for the company is 3.8, how much will you pay for the stock?