10. Calculating Earnings per Share, Price-Earnings Ratio, and Book Value. As a stockholder of Bozo Oil Company,...

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10. Calculating Earnings per Share, Price-Earnings Ratio, and Book Value. As a stockholder of Bozo Oil Company, you receive its annual report. In the financial statements, the firm has reported assets of $9 million, liabilities of $5 million, after-tax earnings of $2 million, and 750,000 outstanding shares of common stock. (Obj. 3)

a. Calculate the earnings per share of Bozo Oil’s common stock.

b. Assuming a share of Bozo Oil’s common stock has a market value of $40, what is the firm’s price-earnings ratio?

c. Calculate the book value of a share of Bozo Oil’s common stock.

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Personal Finance

ISBN: 9780073530697

10th Edition

Authors: Jack Kapoor, Les Dlabay, Robert Hughes

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