6. Market value ratios Rasios are mosthy calculated using data drawn from the finandal statements of a firm. However, another group of ratios, called market value ratios, relate. to a firm's observable market value, whock prices, and book values, integrating information from both the market and the firmis financial statements Consider the case of Cold croase Metal Works Inc.: Cold Goote Metal Works Inc just reported esrnings after tax (also called nec income) of s8,000,000 and a current stock price of $14. 75 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 1,500,000 new shaces of stock (raising its shares outstanding from 5,500,000 to 7,000,000 ). If Cold Goose's forecast tums out to be correct and its price/earnings (P/E) ratio does not change, what does the company's maragement expect its stock price to be one year from new? (Round any P/E ratio calculation to four decimal places.) $14.55 per share 514.75 per share $10.91 per share \$18.19 per share One year later, Cold Coosels shares are trading at $47,12 per share, and the company reports the value of its total common ecuity as 520,370,000. Civen this information, cold Coose's market-to-book (M/B) ratio is Can a company's shares exhibit a negative p/e ratio? No Yes Which of the following statements is true about market value ratios? Componies with high research and development (RSD) expenses tend to have high P/E ratios. Companies with high research and development (AsD) expenses tend to have low Pie ratios