Problem:
On January1, the company has Total assets of $8,600 financed by Debt of $4,700 and Stockholders' equity of $3,900; for 120 common shares outstanding, the equity price-to-book ratio is 0.77. During the subsequent year the company does not issue new shares. They also expect an asset turnover ratio of 2.7; a 4.80% net profit margin; and a 60% payout ratio.
Required:
Question: If the year-end equity price-to-book ratio were 0.83, what year-end shareprice is forecast?
A. $33.07
B. $44.01
C. $30.06
D. $36.37
E. $40.01
Note: Show supporting computations in good form.