Blitz Corp. had total sales of $3,010,000 last year and has 106,000 shares of stock outstanding. The benchmark PS is 1.6 times. What stock p

Blitz Corp. had total sales of $3,010,000 last year and has 106,000 shares of stock outstanding. The benchmark PS is 1.6 times. What stock price would you consider appropriate?

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  1. Answer:

    the stock price is $45.44

    Explanation:

    The computation of the stock price is shown below:

    Sales per share is

    = Total sales ÷ stock outstanding  shares

    = $3,010,000 ÷ 106,000 shares

    = $28.40

    Now

    Benchmark PS = Stock price ÷ Sales per share

    Stock price = $28.40 × 1.6

    = $45.44

    hence, the stock price is $45.44

    We simply applied the above formula so that the correct value could come

    And, the same is to be considered

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