All categories

3 years ago

12. A company has an EPS of $2.00, a book value per share of $20, and a market/book ratio of 1.2x. what is its P/E ratio

Business

1 answer:

Tcecarenko [31]3 years ago

5 0

Answer:

P/E Ratio = 12x or 12 times

Explanation:

We know that the P/E ratio is calculated by dividing the price per share by the earnings per share or EPS.

P/E = Price per share / Earnings per share

We already have EPS. We need to calculate the price per share.

It is given that book value per share is $20 and the market to book ratio is 1.2x or 1.2 times. Using the formula for market to book ratio, we calculate the market price per share to be,

M/B = Market price per share / Book value per share

1.2 = Market price per share / 20

20 * 1.2 = Market price per share

Market price per share = $24

So, P/E ratio = 24 / 2

P/E Ratio = 12x or 12 times

You might be interested in

a system has two processes and three identical resources. each process needs a maximum of two resources. is deadlock possible? e

Naddik [55]

A system has two processes and three identical resources. each process needs a maximum of two resources.---<u> Deadlock is not possible</u>.

<h3>What's deadlock explain?</h3>

A deadlock is a situation in which two computer programs participating the same resource are effectively precluding each other from penetrating the resource, performing in both programs ending to serve. The foremost computer operating systems ran only one program at a time.

<h3>What happens in deadlock?</h3>

Deadlock is a situation where a set of processes are blocked because each process is holding a resource and staying for another resource acquired by some other process

Learn more about deadlock:

brainly.com/question/25541016

#SPJ4

5 0

8 months ago

ABC Company is considering investing in new production equipment at a cost of $60,000 with a 10-year useful life and no salvage

ikadub [295]

Answer:

a. Operating Income = Sales - Production Cost - Depreciation Expense

Operating Income = $100,000 - $82,600 - $6,000

Operating Income = $11,400

b. Average Investment = (Initial Equipment Cost + Residual Value) / 2

Average Investment = ($60,000 + $0) / 2

Average Investment = $60,000 / 2

Average Investment = $30,000

c. Accounting Rate of Return = (Operating Income / Average Investment) * 100

Accounting Rate of Return = ($11,400 / $30,000) * 100

Accounting Rate of Return = 0.38 * 100

Accounting Rate of Return = 38%

7 0

2 years ago

On October 31, Year 1, A company general ledger shows a checking account balance of $8,445. The company’s cash receipts for the

slamgirl [31]

Answer:

Balance as per cash book $ 8,445

Adjustments to be recorded in cash book

Less: Bank Service Fees $ ( 310)

Add: Note receivable $ 6,600

Add: Interest earned <u>$ 1,120</u>

Adjusted cash balance <u>$ 15,855</u>

Balance as per bank statement $ 12,895

Add: Deposits in transit ( $ 74,640 - $ 71,375) $ 3,265

Less: Unpresented cheques ( $ 72515- 71270) $ (1,245)

Add: Correction of error <u>$ 940</u>

Adjusted bank balance $ 15,855

Explanation:

For cash book, the adjustments that have to be recorded are the bank service fees, collection of notes and interest.

For bank statements, the adjustments that have to be recorded are the deposits in transits ( collections not deposited). unpresented cheques ( cheques issued but not presented) and the correction of the wrong entry.

3 0

3 years ago

You plan to construct a restaurant on a 20,000 square foot lot

labwork [276]

Answer:

8,000 square foot

Explanation:

Total space available 20,000 square foot.

60 percent to be used. space left?

If 60% is will be used, only 40% will be availble for construction.

40% of 20,000= 40/100x 20,000

=0.4 x 20,000

=8,000 square foot

6 0

3 years ago

A public debt which is owed to foreigners can be burdensome because: a foreign interest rates are persistently higher than domes

yulyashka [42]

<span>A public debt owed to foreigners can be burdensome because B) payment of interest reduces the volume of goods. This can usually be seen illustrated in the form of a nation lending another nation money. The debt is public because the whole nation takes it on. The lending nation then is lacking in terms of use by the lending nation.</span>

4 0

3 years ago