7. Market value ratios Ratios are mostly caiculated using dota drawn from the financal statements of a firm. However, another group of ratios, called market-based ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements, Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. Just reported earnings after tax (also called net income) of $95,000,000, and a current stock price of $14.75 per share. The company is forecasting an increase of 25% for its after-tox income next yoar, but it also expects it will have to Issue 2,800,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,300,000). If Cold Goose's forecast tums out to be correct and its price-to-eamings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Note: Found intermediate calculabons to four decimal places. Round the expected stock price to two decimal places.) $12.22 per share $15 per share $9.17 per share 515.28 per share One year later, Cold Goose's shares are trading at $47.12 per share, and the company reports the value of its total common eaiatv as $20,285,200. Given this information, Cold Goose's market-tobook (M/B) ratio is (Note: Do not round intermediate calculations:) Is it possible for a company to exhibit a negative EPS and thus a negative P/E ratio? Which of the following statements is true obout market value retios? Low P/E ratios could mean that the company has a great deal of uncertainty in ita future earnings. High P/E ratios could mean that the company has a great deal of uncertainty in its future eamings