a4

docx

School

University of Phoenix *

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Course

10

Subject

Finance

Date

Nov 24, 2024

Type

docx

Pages

2

Uploaded by AdmiralPonyMaster845

Report
a) Earnings per Share (EPS) = Addition to Retained Earnings / Number of Common Shares Outstanding b) Dividends per Share = Cash Dividends / Number of Common Shares Outstanding c) Book Value per Share = Total Equity / Number of Common Shares Outstanding d) Price-Earnings Ratio (P/E ratio) = Share Price / Earnings per Share a) Earnings per Share (EPS): EPS = Addition to Retained Earnings / Number of Common Shares Outstanding EPS = $595,000 / 370,000 EPS ≈ $1.61 per share b) Dividends per Share: Dividends per Share = Cash Dividends / Number of Common Shares Outstanding Dividends per Share = $395,000 / 370,000 Dividends per Share ≈ $1.07 per share c) Book Value per Share: Book Value per Share = Total Equity / Number of Common Shares Outstanding Book Value per Share = $18,300,000 / 370,000 Book Value per Share ≈ $49.46 per share d) Price-Earnings Ratio (P/E ratio): P/E ratio = Share Price / Earnings per Share P/E ratio = $47 / $1.61 P/E ratio ≈ 29.19 Based on the provided data, the stock has an EPS of $1.61, a dividend per share of $1.07, and a book value of $49.46. The store may be unusually costly in its profits, given the P/E ratio of 29.19. Beyond the supplied financial measures, other considerations will determine if this stock is an intelligent investment. A high P/E ratio shows that investors are prepared to pay more for the company in anticipation of future strong growth. Before making an investment choice, it is crucial to consider the
company's financial stability, future growth potential, market circumstances, and industry trends. Before purchasing any stock, investors should carefully assess their risk tolerance.
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