1. Like many tech firms, Googel does not pay dividends. Nonetheless, as a potential investor you are determined to calculate its stock price. Googels income statement for 2019 is shown below. Googel has 703 million shares of common stock outstanding, and tech firms have a benchmark P/E ratio of 24. Use the information to answer the questions below.

Googel Income statement - Year Ended Dec. 31, 2019
(in millions USD)
Revenues	$136,819
Costs and expenses
Cost of revenues	$59,549
Research and development	$21,419
Sales and marketing	$16,333
General and administrative	$13,197
Total costs and expenses	$110,498
EBIT	$26,321
Other income (expense) net	$8,592
Income before taxes	$34,913
Provision for income taxes	$4,177
Net income	$30,736

1. Define EPS (you can refer to page 63 in your textbook).

2. Calculate Googels EPS.

3. What does a P/E ratio of 24 mean for Googel?

4. Calculate Googels stock price using multiples.
5. Why would a firm like Googel not pay dividends? (explain in 1-2 sentences)

6. Why would an investor buy stock that does not pay any dividends? (explain in 1-2 sentences).