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I am Lyosha [343]
3 years ago
12

A company reported net income of $6 million. During the year the average number of common shares outstanding was 3 million. The

price of a share of common stock at the end of the year was $5. There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative. The EPS is approximately: a.$0.40. b.$1.76. c.$1.86. d.$2.00. The Price/Earnings ratio is approximately: a.2.00. b,2.50. c,2.84. d.12.50. Price to Earnings Ratio (P/E): The price to earnings ratio (P/E) is used a relative valuation or multiple for shares of stock. The multiple is based on earnings per share (EPS). So, if a company has a PE ratio of 2, it means the share price is trading at 2 times earnings. If the PE ratio is 20, it means the share price is trading at 20 times earnings. Since earnings are earnings, the PE ratio acts like a price tag. Some companies have a higher share price for the same level of earnings. Why
Business
1 answer:
malfutka [58]3 years ago
7 0

Answer:

The EPS is approximately:

it can be any of them:

  • if preferred dividends = $4,800,000, then EPS = $0.40 (option A)
  • if preferred dividends = $720,000, then EPS = $1.76 (option B)
  • if preferred dividends = $0, then EPS = $2 (option D)

EPS = (net income - preferred dividends) / outstanding shares = ($6,000,000 - preferred dividends) / 3,000,000 shares

The Price/Earnings ratio is approximately:

  • if EPS = $0.40, then PE ratio = 12.5 (option D)
  • if EPS = $1.76, then PE ratio = 2.84 (option C)
  • if EPS = $2, then PE ratio = 2.5 (option B)

Price/earnings (PE) ratio = share price / EPS = $5 / EPS

EPS cannot be $1.80, since PE ratio = 2.78 and that is not an option.

Some companies have a higher share price for the same level of earnings. Why?

Some stocks like Amazon have a very low EPS, form any years its EPS was very low bu its stock price kept rising. The stock price is based mostly on potential future earnings, not current earnings. A company that is being liquidated might have a high EPS, but a very low stock price since it will stop operating soon.  

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The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished product
denis-greek [22]

Answer:

The correct answer is (A)

Explanation:

The cost which is directly associated with converting materials into a finished product is known as direct labour cost. The cost of wages paid to employees is the direct cost involved in the manufacturing process. In other words, a cost that is directly involved in the production of goods and services is the direct cost, for example, direct cost, direct commission, direct material cost.

5 0
3 years ago
What are some of the ways in which the government is involved in the economy? what are the advantages and disadvantages of gover
ArbitrLikvidat [17]
The government can control tariffs and can limit how much can be imported into the usa.
The government can provide subsidies to certain producers, typically farmers.
The government can put a ceiling and a floor on prices as they wish. They can control the lowest and highest price a commodity can sell for.
The government can own public works such as a water company if they feel they can provide the service for a lower cost than the local competitors.
The government can decide which companies are monopolies and which companies are violating federal policies regarding trade. The government has the power to break up monopolies.
Each of these has advantages and disadvantages. For example, for farmers, when prices on their crops are too low, the government "gives" them money for their crops so they can stay in business.
A monopoly business controls the price and supply. If the monopoly is broken up, then competitors can enter the field- this can help drive down prices.
If the government can provide utility services for cheaper, that is good.

5 0
3 years ago
W+w+w
Step2247 [10]

Answer:

3w

4n-3

10.641

Explanation:

3w

n+3n-3, 4n-3 (distribute your 3 through the paranthasis)

4.871+7.4= 12.271

12.271-1.63= 10.641

I'm lost on your last three,

what are the periods for, and is the third to last one a comma or decimal

3 0
3 years ago
Yakov, Ana, and Dina want to bake a cake. They are choosing among chocolate cake (C), vanilla cake (V), and red velvet cake (R).
vovangra [49]

Answer:

The specified preferences of Charles, Diana and Juanita. Charles and Juniata prefer chocolate over red velvet cake. Dina favors red velvet over chocolate.

So, when there is voting among red velvet and chocolate cake, the majority will select the Chocolate cake and among winner and vanilla majority will vote for Vanilla cake.

This is because Dina and Juanita favor vanilla over chocolate.

Among Chocolate and vanilla cake, the majority will elect for vanilla and among this winner and red velvet cake, the majority will choose for Red velvet cake.

This is because Diana and juanita favor vanilla over chocolate. So, vanilla cakes get majority elects. When there is voting among vanilla and red velvet , red vanilla acquire majority votes as charles and dina favor red velvet over vanilla.

The statement is False. The preferences are not transitive.

In the first situation chocolate is chosen to vanilla and red velvet is preferred to vanilla. Although, in the second situation, chocolate is favored to red velvet and vanilla is preferred to chocolate. Thus, the preferences do not exhibit transitivity.

8 0
3 years ago
Which bank does not charge at all for using the ATM?
const2013 [10]
Bank A is the answer
6 0
3 years ago
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