Answer:
The expected price for the stock is $36
Explanation:
The price earning multiple is a measure that provides the information regarding how much are the investors willing to pay for each $1 of earnings per share. The formula for price earnings multiple is,
P/E = Price per share / Earnings per share
Based on the information, the P/E multiple for XYZ is,
P/E = 30 / 2.5 = 12
Using this price / earnings multiplier, we calculate the price at which the stock will trade as,
12 = Price per share / 3
12 * 3 = Price per share
Price per share = $36
Answer:
See the explanation below for the basic EPS and diluted EPS
Explanation:
To calculate EPS we use the earnings of the company adjusted for any income for preferential shareholders. In this case there is no preference shareholders. Thus income attributable to ordinary shareholders is $ 420 000 (net income)
Average outstanding shares for BASIC eps calculation is 1500 000 shares.
BASIC EPS = 420/1500
= $ 0,28 per ordinary share
When calculating diluted EPS we include instruments that can potentially increase the number of shares and dilute net income. Thus we will include the 60,000 shares to executives that have a three year condition attached to them.
Diluted EPS = 420/(1500+60)
= $0,269
Answer:
considerably lower than in several other industrially advanced nations.
Explanation:
