Preston Woods Has 17,500 Shares of Stock Outstanding Along with $408,000

Multiple Choice

Preston Woods has 17,500 shares of stock outstanding along with $408,000 of interest-bearing debt.The market and book values of the debt are the same.The firm has sales of $697,000 and a profit margin of 6.8 percent.The tax rate is 21 percent,the debt-equity ratio is 40 percent,and the price-earnings ratio is 11.8.The firm has $130,000 of current assets of which $41,200 is cash.What is the enterprise value multiple?

A) $1,106,308
B) $994,520
C) $830,479
D) $1,018,097
E) $926,073