Financial planning cases 14-6 A College Student Ponders Investing in the Stock Market Ji Wu of Troy, New York, has $5,000 that he wants to invest in the stock market. Ji is in college on a scholarship and does not plan to use the $5,000 or any dividend income for another five years, when he plans to buy a home. He is currently considering a small company stock selling for $30 per share with an EPS of $2.00. Last year, the company earned $800,000, of which $250,000 was paid out in dividends. a. Review Table 14-1. What classification of common stock would you recommend to Ji? Ji should buy b. Calculate the P/E ratio and the dividend payout ratio for this stock. Round your answers to the nearest whole number. P/E ratio Dividend payout ratio 3 Given this information and your recommendation, would this stock be an appropriate purchase for Ji? Why or why not? This stock be appropriate for Ji because the P/E ratio suggests that it is a company c. Identify the components of the total return Ji might expect. Total return is the combination of the \{