9 Consider three corporations in thesame industry. In general, corporationsin this industry have a PE ratio of 15.Corporation A has a share price of $55and earnings per share of $3.50Corporation B has a share price of $95and earnings per share of $6.25Corporation C has a share price of $20and earnings per share of $1.80a) Use this information to calculate theintrinsic value per share of eachcorporation.b) Based on this information, which ofthese corporations would afundamental analyst think was the bestinvestment?

Corporation- A corporation is a legal entity that, in the eyes of the law, has the identity of a…

Answered: Consider three corporati same industry.…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.4: Analyzing Financial Statements Using Financial Ratios

Problem 1WT

See similar textbooks

Similar questions

The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as follows: Includes both state and federal taxes. Refer to the information for Santiago Systems above. Note: Round answers to two decimal places. 1. Compute the number of common shares. 2. Compute earnings per share.
The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Includes both state and federal taxes. Refer to the information for Somerville Company on the previous pages. Also, assume that the price per common share for Somerville is 8.10. Required: Compute the price-earnings ratio. (Note: Round the answer to two decimal places.)
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the balance sheet date, MJOs stock was selling for S25 per share. Required: Assuming MJOs dividend yield is 1%, what are the dividends per common share? Assuming MJOs dividend yield is 1% and its dividend payout is 20%, what is MJOs net income?
The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Includes both state and federal taxes. Refer to the information for Somerville Company on the previous pages. Required: Note: Round answers to two decimal places. 1. Compute the number of common shares. 2. Compute earnings per share.
Behlens Manufacturing has calculated its earnings per share as $1.25. If the corporation has 500,000 shares outstanding, what is the amount of after-tax income?
The Namleda Corporation has an income statement that indicates thatoperating income is $2,375,486 and pays interest of $100,000 and taxes of$900,000. The corporation currently has an average of 3 million shares ofcommon stock outstanding and 1 million shares of preferred stock, whichpays a dividend of $1.00 per share. What is the corporation’s approximateearnings per share?
Benkart Corporation has sales of \$5,000,000 , net Income of 800,000, total assets of \$2,000,000 , and 100, 000 shares of common stock Outstanding. If Benkart's stock price $96 per share, what is the company's P/E ratio?
Both companies pay dividends of $5.20 per share and their stock prices are both at $102.50. Evaluate these companies from the perspective of an investor using appropriate financial ratios.
Dodd Corporation is a private company that earned $4.00 per sharefor the most recent year. If the average P/E ratio of a group ofcomparable public companies is 11, what is an estimate of Dodd’sstock value on a per share basis? ($44.00)
Advise the current and potential shareholders of TAN ple whether they should sell or keep their shares in the company and why. Given that the industry average for some of the ratios are as follows: net profit ratio is 20%, current ratio is 120%, debtors' days 110 days and creditors days 130 days
Corporation X, with a current market value of 62, gave a dividend of 9 per share for its common stock. Corporation Y, with the current market value of 90, gave a dividend of 11 per share. Which company has higher stock yield ratio?

SEE MORE QUESTIONS

Recommended textbooks for you

Century 21 Accounting Multicolumn Journal

Accounting

ISBN:

9781337679503

Author:

Gilbertson

Publisher:

Cengage

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Century 21 Accounting General Journal

Accounting

ISBN:

9781337680059

Author:

Gilbertson

Publisher:

Cengage

Century 21 Accounting Multicolumn Journal

Accounting

ISBN:

9781337679503

Author:

Gilbertson

Publisher:

Cengage

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Century 21 Accounting General Journal

Accounting

ISBN:

9781337680059

Author:

Gilbertson

Publisher:

Cengage

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

SEE MORE TEXTBOOKS

Consider three corporati same industry. In genera in this industry have a PE