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dangina [55]
3 years ago
12

Ale Corporation had net income of $240,000 and paid dividends to common stockholders of $40,000 in 2017. The weighted average nu

mber of shares outstanding in 2017 was 60,000 shares. Ale Corporation's common stock is selling for $76 per share on the New York Stock Exchange. Ale Corporation's price-earnings ratio is?

Business
2 answers:
Aneli [31]3 years ago
7 0

Answer:

The price earnings ratio is 19:1

Explanation:

The price earnings ratio tells us that how much price the investors are willing to pay for $1 of earnings provided by the company. The price earnings ratio is calculate by dividing the price per share by the earnings per share.

Price earnings ratio = Price per share / Earnings per share

The price per share is the market price of the stock.

The earnings per share is calculated using the following formula:

Earnings per share = Net Income  /  Weighted average shares outstanding

Earnings per share = 240000 / 60000 = $4 per share

The price earnings ratio = 76 / 4  =  19 / 1   or 19:1

givi [52]3 years ago
6 0

Answer:

19times

Explanation:

The solution can be seen in the picture attached

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