Question
Price-Earnings Ratio; Dividend Yield The table that follows shows the stock price, earnings per share, and dividends per share for three companies for a recent
Price-Earnings Ratio; Dividend Yield
The table that follows shows the stock price, earnings per share, and dividends per share for three companies for a recent year:
Price | Earnings per Share | Dividends per Share | ||||
Jones Co. | $82.95 | $3.50 | $2.24 | |||
Smith Co. | 229.25 | 3.50 | 4.36 | |||
Tucker Co. | 14.64 | 0.80 | 0.63 |
a. Determine the price-earnings ratio and dividend yield for the three companies. Round to one decimal place. If an amount should be zero, enter in "0".
Price-Earnings Ratio | Dividend Yield | |
Jones Co. | fill in the blank 1 | fill in the blank 2 % |
Smith Co. | fill in the blank 3 | fill in the blank 4 % |
Tucker Co. | fill in the blank 5 | fill in the blank 6 % |
b. Explain the differences in these ratios across the three companies by completing the following: Tucker Co. has the lowest/highest price-earnings ratio. Jones Co. has both a high/low dividend yield and price-earnings ratio and is expected to produce shareholder returns through a combination of some share price appreciation and a moderate dividend/price appreciation only. Smith Co. has the lowest/highest price-earnings ratio of the three companies.
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