Rent €™N Drive, Inc. is a publicly owned, truck leasing company based in Iowa. Presented in the following schedule are selected financial data for Rent €™N Drive€™s common stock over a recent five-year period.

Required:
(a) Compute Rent €™N Drive€™s market price to book value ratio for 2005 through 2009.
(b) Given the industry in which it operates, what factors may have contributed to the decline in Rent €™N Drive€™s book value per share in 2007?

Transcribed Image Text:

2005 2006 2007 2008 2009 Earnings per share 0.10 3.02 S (1.68) 3.90 S 3.72 Dividends per share 0.0 0.60 0.0 0.60 0.60 Book value per share 35.00 36.52 25.62 28.66 31.28 Market price per share 44.26 48.95 44.12 61.05 62.78