Use the following comparative figures for Apple and Google. Google 12.662 $ Key Figures Net income (in millions) Cash dividends
declared per common share Common shares outstanding in millions) Weighted average common shares outstanding (in millions) Market value (price) per share Equity applicable to common shares (in millions) Apple $ 48,351 $ 2.40 5,126.201 5,217.242 $ 154.12 $ 134,047 694.783 693.049 $1.046.40 $152,502 Required: 1. Compute the book value per common share for each company using these data. 2. Compute the basic EPS for each company using these data. 3. Compute the dividend yield for each company using these data. 4. Compute the price-earnings ratio for each company using these data. 5. Based on the PE ratio, for which company do investors have greater expectations about future performance? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the book value per common share for each company using these data. (Round your answers to 2 decimal places.) Book Value Per Common Share Apple Google
1 answer:
Answer and Explanation :
Few information is missing in the question kindly find the attachment
As per the data given in the question,
The formula and the computation is shown below
1) Book value per share = Equity applicable to share ÷ share outstanding
Apple Google
Equity common share a $134,047 $152,502
Common share outstanding b 5,126.201 694.783
Book value per common share a ÷ b $26.15 $219.50
2)Basic EPS = Net income ÷ weighted Avg common share outstanding
Apple Google
Net income a $48,351 $12,662
weighted Avg common share outstanding b 5217.242 693.049
Basic EPS a ÷ b $9.27 $18.27
3)Dividend yield = Cash dividend per common share ÷ Market price per share
Apple Google
Cash dividend per common share a 2.4 0
Market price per share b $154.12 $1046.4
Dividend yield a ÷ b 1.56% 0.00%
4) Price earning ratio = Market price per share ÷ Basic EPS
Apple Google
Market price per share a $154.12 $1046.4
Basic EPS b 9.26754 18.26999
Price earning ratio a ÷ b 16.63 57.27
5) A higher PE ration indicates that investors want to pay a higher share price because of growth expectation in near by future
Therefore Google has higher PE ratio
Hence, investors have greater expectation of performance of Google in future.
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