Use the Tables for the Question(s) Below

question 8

Multiple Choice

Use the tables for the question(s) below.
Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation
The following are financial ratios for three comparable companies:

-Based upon the average P/E ratio of the comparable firms,Ideko's target market value of equity is closest to:

• A) $157 million
• B) $155 million
• C) $193 million
• D) $165 million
• E) $191 million

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Definitions:

Fixed Costs

Costs that remain constant for a set period of time, regardless of changes in the level of activity or volume of output.

Contribution Margin Ratio

The portion of sales revenue that exceeds variable costs, expressed as a percentage.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.