Question
e-Shop Inc. provides the following information for the year 2015: Net income $250,000 Market price per share of common stock $50 per share Dividends paid
e-Shop Inc. provides the following information for the year 2015:
| Net income | $250,000 |
| Market price per share of common stock | $50 per share |
| Dividends paid | $180,000 |
| Common stock outstanding at Jan. 1, 2015 | 150,000 shares |
| Common stock outstanding at Dec. 31, 2015 | 200,000 shares |
The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.
| A. 35 times | ||
| B. 45 times | ||
| C. 40 times | ||
| D. 50 times |
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Cornerstones of Financial and Managerial Accounting
Authors: Rich Jones, Mowen, Hansen, Heitger
1st Edition
978-0324787351
