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: LOADING… . Find the average? P/S ratio for these three firms. Given that 4W is expected to generate ?$46 million in sales next year and will have 19 million shares of stock? outstanding, use the average? P/S ratio you computed above to put a value on? 4W’s stock.
Company P/S Multiples
Amazing.com 4.9
ReallyCooking.com 4.3
Fixtures & Appliances Online 4.1
The average? P/S ratio for the 3 firms is _____ .?(Round to two decimal? places.)
The value of? 4W’s stock is ?$____. ?(Round to the nearest? cent.)
