The developers of your new system have proposed two different AIS designs and have asked you to evaluate them. This evaluation p
1 answer:
You might be interested in
Answer:
price earning ratio = 19.44 times
so correct option is c. 19.44
Explanation:
given data
net income = $103,000
common stock outstanding beginning = 38,000 shares
common stock outstanding ending = 44,000 shares
preferred stock outstanding = 5,000 shares
paid preferred dividends = $29,000
common stock = $35.00 per share
market price preferred stock = $55.00 per share
to find out
Lark's price earnings ratio
solution
first we get here average no of equity share that is
average no of equity share = common stock outstanding beginning + common stock outstanding ending ÷ 2
average no of equity share =
average no of equity share = 41000 share
and
earning per share will be here as
earning per share = ( net income - paid preferred dividends ) ÷ average no of equity share
earning per share =
earning per share = $1.80
so here price earning ratio will be as
price earning ratio =
price earning ratio =
price earning ratio = 19.44 times
so correct option is c. 19.44