Answer:
The market-to-book ratio is 1.87
Step-by-step explanation:
From the data provided we have;
Number of shares of stock outstanding = 160,000
sales = $1.94million
net income = $126,400
price earnings ratio = 18.7
book value per share = $7.92
To determine the market-to-book ratio, we solve;
earnings per share = net income ÷ number of shares of stock outstanding
= $126400 ÷ 160000
= $0.79
price per share = earnings per share ÷ price earnings ratio
= 0.79 x 18.7
= $14.773
market-to-book ratio = price per share ÷ book value per share
= $14.773 ÷ $7.92
market-to-book ratio = 1.87
