Answered: ABC Corporation has net income of…

ABC Corporation has net income of $2,500,000. It has 500,000 weighted-average common shares outstanding and a market value per share of $75. What is the company's price-earnings ratio?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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Question

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I need the correct answer to this general accounting problem using the standard accounting approach.

ABC Corporation has net income of $2,500,000. It
has 500,000 weighted-average common shares
outstanding and a market value per share of $75.
What is the company's price-earnings ratio?

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Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)
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