Answered: A company reports earnings per share on…

A company reports earnings per share on common stock of $2.00 when the market price of per share of common stock is $50.000. What is the company’s price-earnings ratio?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 11BE

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

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A company reports earnings per share on common stock of $2.00 when the market price of per share of common stock is $50.000. What is the company’s price-earnings ratio?

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