EPS and price-earnings ratio (Learning Objectives 2 & 3) 10–15 min.

In addition to the information from S12-8, assume that Joudi has 50,000 shares of common stock outstanding in 2014 and had 40,000 shares of common stock outstanding in 2013. The market price of the stock is $25 per share. Compute the following for 2014:

1. Earnings per share 2. Price-earnings ratio AppendixLO1