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Semenov [28]
3 years ago
6

Weightman Corporation's net operating income in Year 2 was $76,385, net income before taxes was $55,385, and the net income was

$36,000. Total common stock was $200,000 at the end of both Year 2 and Year 1. The par value of common stock is $4 per share. The company's total stockholders' equity at the end of Year 2 amounted to $983,000 and at the end of Year 1 to $950,000. The market price per share at the end of Year 2 was $7.92. The company's price-earnings ratio for Year 2 is closest to:
0.58
11.00
5.18
7.14
Business
1 answer:
muminat3 years ago
5 0

Answer:

11.00

Explanation:

Earnings \: per \: share = \frac{net \: income}{shares}

36,000 net income

200,000 common stock / $4 per share= 50,000 shares

36,000 / 50,000 = 0.72 earnings per share

price-earnings \: ratio = \frac{market\: price}{EPS}

7.92 / 0.72 = 11

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