1. Kristy Nguyen is trying to decide between two different stock investments, and she asks for your...
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1. Kristy Nguyen is trying to decide between two different stock investments, and she asks for your help. Information about each investment is below.
Company Price per share Annual Dividend After-Tax Income This Year Projected Earnings Next Year Number of Shares Outstanding One Source Manufacturing
$24 $0.40 $35 million $39 million 20 million shares Down South Homes
$40 $0.56 $122 million $90 million 140 million shares
a. Calculate the dividend yield for each company.
b. Calculate the earnings per share for each company.
c. Calculate the price-earnings (P/E) ratio for each company.
d. Based on this information, which company would you recommend?
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