A company reports the following:
| Net income | $745,000 |
| Preferred dividends | $42,000 |
| Shares of common stock outstanding | 95,000 |
| Market price per share of common stock | $31.82 |
a. Determine the company’s earnings per share on common stock.
b. Determine the company’s price-earnings ratio.
The Beckett Company reports $700,000 of net income. The company also had the following account balances:
$5 Preferred stock, $100 par, 10,000 shares issued and outstanding: $1,000,000
Common stock, $10 par, 125,000 shares issued and outstanding: 1,250,000
There were no changes in the stock accounts during the year. EPS for the year is:
A. $5.60
B. $5.20
C. $0.56
D. $5.19
The corporation has earnings of $2.50 per share and pays out $0.50 per share in dividends. The Return-on-Equity (ROE) is 18 and has a PE ratio of 14.
What is the annual growth rate of this company?
a. 14.40%
b. 11.20%
c. 3.60%
d. 2.80%
You expect KT Industries will have an earning per share of $5, and expect they will pay out $1.50 of those earnings in the form of a dividend. KTI’s return on new investment is 14% and its equity cost of capital is 10%. The value of KTIs stock is closest to:
a. $300,000
b. $450,000
c. $750,000
d. $900,000
