Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. world wide web wares (4w, for short) is an online

World Wide Web Wares (4W, for short) is an online retailer of small kitchen appliances...

90.2K

Verified Solution

Question

Finance

World Wide Web Wares (4W, for short) is an online retailer of small kitchen appliances and utensils. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you've decided to take a closer look. You plan to use the price-to-sales ratio to value the stock, and you have collected P/S multiples on the following Internet retailer stocks: table below.. .

a. Find the average P/S ratio for these three firms.

b. Given that 4W is expected to generate $48 million in sales next year and will have 7 million shares of stock outstanding, use the average P/S ratio you computed above to put a value on 4W's stock.

image

X Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) P/S Multiples 4.8 Company Amazing.com ReallyCooking.com Fixtures & Appliances Online 4.3 4.1 Print Done

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students