1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Shkiper50 [21]
3 years ago
6

Stilley Corporation had earnings after taxes of $438,000 in 20X2 with 200,000 shares outstanding. The stock price was $42.10. In

20X3, earnings after taxes declined to $208,000 with the same 200,000 shares outstanding. The stock price declined to $28.30. a. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) b. Compute earnings per share and the P/E ratio for 20X3. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)\
Business
1 answer:
charle [14.2K]3 years ago
5 0

Answer:

a) <em>Earnings Per Share for 20X2 = 2.19</em>

<em>P/E ratio for 20X2 = 19.22</em>

<em />

<em>b) Earnings Per Share for 20X3 = 1.04</em>

<em>P/E ratio for 20X3 = 27.21</em>

Explanation:

a) Compute earnings per share and the P/E ratio for 20X2.

The compute the earnings per share use the following:

Earnings Per Share for 20X2 = (Earnings after tax-Preference Dividend) / shares outstanding

= \frac{438,000 - 0}{200,000} = 2.19

Earnings Per Share for 20X2 = 2.19

Then find P/E ratio:

P/E ratio for 20X2 = Market Price per share / Earnings Per Share

\frac{42.10}{2.19} = 19.224

P/E ratio for 20X2 = 19.22

b) Compute earnings per share and the P/E ratio for 20X3.

The compute the earnings per share use the following:

Earnings Per Share for 20X3 =(Earnings after tax-Preference Dividend) / shares outstanding

= \frac{208,000 - 0}{200,000} = 1.04

Earnings Per Share for 20X3 = 1.04

Then find P/E ratio:

P/E ratio for 20X3 = Market Price per share / Earnings Per Share

\frac{28.30}{1.04} = 27.21

P/E ratio for 20X3 = 27.21

You might be interested in
Pharoah Company issued $530,000 of 5-year, 5% bonds at 97 on January 1, 2020. The bonds pay interest annually. Your answer is pa
Slav-nsk [51]

Answer:

                                                Dr.             Cr.

Cash                                      $514,100

Discount on bond payable  $15,900

Bond Payable                                       $530,000

Explanation:

Cash is received against the Bond issued is debited due to its debit nature and the bond payable account is credited because it is a liability and its nature is credit.

Cash Received = ( 530,000 / 100 ) x 97 = $514,100

Discount  = (530,000/100) x (100 - 97) = $15,900

4 0
3 years ago
Scarcity is a condition that is everywhere and always, since it is based upon two assumptions that reflect permanent universal c
Musya8 [376]

Answer:

Scarcity is a condition that is everywhere and always, since it is based upon two assumptions that reflect permanent universal conditions. The assumptions are that more output will satisfy more wants and the world has limited productive resources

Explanation:

Due to the fact that there is high demand in market and there is limited productive resources which in turns affect the demand, hence; causing scarcity

3 0
3 years ago
Which of the following is NOT a chief advantage of mass transit over other forms of transportation?
Aleksandr [31]
I believe it's D. Freedom from car owner responsibilities. Mass transit or public transit enable to carry a bigger number of persons in one way transport. Thus, it helps the economy to grow at the same time, it saves energy since in just 1 transport a lot of people can already ride on it. Plus, it gives flexible door to door services
8 0
3 years ago
True or false: you should only create a slide presentation if you know that you will be presenting in a smart room.
siniylev [52]
The answer C i think hope this help


5 0
3 years ago
Read 2 more answers
Splish Brothers Inc. issues $4.8 million, 5-year, 7% bonds at 102, with interest payable on January 1. The straight-line method
Radda [10]

Answer and Explanation:

The Journal entries are shown below:-

Interest expense Dr, $316,800

Premium on bonds payable Dr, $19,200 ($96,000 ÷ 5)

            To Interest payable $336,000    ($4,800,000 × 7%)

(Being interest expense and bond premium amortization is recorded)

Here we debited the interest expenses and premium on bonds as it increased the expenses and we credited the interest payable as it also increased the liabilities

5 0
3 years ago
Other questions:
  • The wholesale cost box of 25 pieces of chocolate is 50 AEDYou decide to sel each bar of chocolate with a 20% profit plus 5% VAT
    7·1 answer
  • Inflation sometimes causes people to pay _____ capital gains tax than they ought to
    15·2 answers
  • When Congress established the Federal Reserve in​ 1913, its main responsibility was
    5·1 answer
  • Which of the following is not an example of risk factors for a multinational company?
    13·1 answer
  • In​ long-run equilibrium, all firms in the industry earn zero economic profit. Why is this​ true? All firms in perfectly competi
    11·1 answer
  • Praetorian Industries will pay a dividend of $2.50 per share this year and has an equity cost ofcapital of 8%. Praetorianʹs stoc
    10·1 answer
  • Jack manages an upscale French restaurant in the Washington, DC, area. His restaurant offers a few specials each evening in addi
    7·1 answer
  • All International Monetary Fund (IMF) loan packages come with conditions attached which limits Group of answer choices
    13·1 answer
  • Leslie Halverson is considering investing in the stock market. She wants to be sure to be able to get her money back whenever sh
    9·1 answer
  • Significant accounting policies may not be:
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!