DailyFinance.com reported one $40 share of Coca-Cola's stock bought in 1919, with dividends reinvested, would be worth $9.8 million today. If the price-earnings ratio was 28.42 at that time, what were the annual earnings per share? (Round your answer to the nearest cent.) Annual earnings per share
DailyFinance.com reported one $40 share of Coca-Cola's stock bought in 1919, with dividends reinvested, would be worth $9.8 million today. If the price-earnings ratio was 28.42 at that time, what were the annual earnings per share? (Round your answer to the nearest cent.) Annual earnings per share
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:DailyFinance.com reported one $40 share of Coca-Cola's stock bought in 1919, with dividends reinvested, would be worth $9.8 million
today. If the price-earnings ratio was 28.42 at that time, what were the annual earnings per share? (Round your answer to the nearest
cent.)
Annual earnings per share
Expert Solution
Step 1
The price-to-earnings ratio (P/E ratio) is the ratio that measures the current share price of the company relative to the earning per share of the company.
A higher P/E ratio indicates that a company's stock is over-valued, or the investors are expecting high growth rates in the future.
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