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based on the information provided estimate approximately how many shares of stock me 650431

Performing ratio analysis using real world data

Merck & Company is one of the world’s largest pharmaceutical companies. The following data were taken from the company’s 2007 annual report.

Fiscal Years Ending

December 31, 2007

December 31, 2006

Net earnings (in millions)

$3,275.4

$4,433.8

Earnings per share

$1.51

$2.04

The following data were taken from public stock price quotes.

Stock price per share on March 3, 2008: $44.06

(Two months after the end of Merck’s 2007 fiscal year.)

Stock price per share on March 1, 2007: $43.99

(Two months after the end of Merck’s 2007 fiscal year.)

Required

a. Compute Merck’s price earnings ratio for March 3, 2008, and March 1, 2007.

b. Did the financial markets appear to be more optimistic about Merck’s future performance on March 1, 2007, or March 3, 2008?

c. Based on the information provided, estimate approximately how many shares of stock Merck had outstanding as of December 31, 2007.

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