Based on the information in Table 4-2, and assuming the company's stock price is $50 per share, the M/B ratio is

Table 4-2

Drummond Company

Balance Sheet

Assets:
Cash and marketable securities	$400,000
Accounts receivable	1,415,000
Inventories	1,847,500
Prepaid expenses	24,000
Total current assets	3,686,500
Fixed assets	2,800,000
Less: accum. depr.	(1,087,500)
Net fixed assets	1,712,500
Total assets	$5,399,000
Liabilities:
Accounts payable	$600,000
Notes payable	875,000
Accrued taxes	92,000
Total current liabilities	$1,567,000
Long-term debt	900,000
Common Stock (100,000 shares)	700,000
Retained Earnings	2,232,000
Total liabilities and owner's equity	$5,399,000
Income Statement
Net sales (all credit)	$6,375,000
Less: Cost of goods sold	(4,375,000)
Selling and administrative expense	(1,000,000)
Depreciation expense	(135,000)
Interest expense	(100,000)
Earnings before taxes	$765,000
Income taxes	(306,000)
Net income	$459,000

		10.89.
		1.71
		2.44
		1.50