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Stock price Earnings per share (EPS) EPS last year Annual Dividend Dividend yield Beta Price to Earnings (PE) ratio STOCK 1 $50 $2 $1.50 $1.00
Stock price Earnings per share (EPS) EPS last year Annual Dividend Dividend yield Beta Price to Earnings (PE) ratio STOCK 1 $50 $2 $1.50 $1.00 1.1 % (calculate) (calculate) STOCK 2 $100 $10 $11 $4.00 .8 % (calculate) (calculate) a. Calculate the dividend yield for both stocks. Interpret the meaning of the dividend yield (Explains what it means) for both stocks. Which stock is more attractive based on dividend yield? b. Define and interpret the EPS number (Explain what it means). Can it be used in determining whether the stock is attractive? If so, how? C. Calculate the P/E ratio for each stock. Compare and interpret the P/E ratios for the two companies d. Based on the data provided, which stock is expected to be more volatile? Why
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