Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

A) 0.52
B) 8.10
C) 6.16
D) 12.52

Question

Spincic Corporation has provided the following data:

The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

A) 0.52
B) 8.10
C) 6.16
D) 12.52

Senait Girma · Accepted Answer

Final Answer : D, Explanation :  Earnings per share = Net Income ÷ Average number of common shares outstanding*= $33,000 ÷ 100,000 shares = $0.33 per share (rounded)*Number of common shares outstanding = Common stock ÷ Par value= $200,000 ÷ $2 per share = 100,000 sharesPrice-earnings ratio = Market price per share ÷ Earnings per share= $4.13 ÷ $0.33 = 12.52 (rounded)

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

A) 0.52
B) 8.10
C) 6.16
D) 12.52

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Learning Objectives

Learning Objectives

Related questions

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:A) 0.52B) 8.10C) 6.16D) 12.52

Definitions

Learning Objectives

Learning Objectives

Related questions

Spincic Corporation has provided the following data: The market price of common stock at the end of Year 2 was $4.13 per share.The company's price-earnings ratio for Year 2 is closest to:

A) 0.52
B) 8.10
C) 6.16
D) 12.52