A company report the following ---**Earnings per Share and Price-Earnings Ratio**A company reports the following:- **Net Income:** $829,000- **Preferred Dividends:** $47,000- **Shares of Common Stock Outstanding:** 85,000- **Market Price per Share of Common Stock:** $104.88**Steps for Calculation:****a. Determine the company's earnings per share on common stock.** Round your answer to the nearest cent. Use the rounded answer of requirement a for subsequent requirement, if required.*Calculation Box:* $_________**b. Determine the company's price-earnings ratio.** Round to one decimal place.*Calculation Box:* _________---**Explanation:**### Calculating Earnings per Share (EPS)**Formula:** \[ \text{EPS} = \frac{\text{Net Income} - \text{Preferred Dividends}}{\text{Shares of Common Stock Outstanding}} \]### Calculating Price-Earnings (P/E) Ratio**Formula:** \[ \text{P/E Ratio} = \frac{\text{Market Price per Share}}{\text{Earnings per Share}} \]To find the EPS:1. Subtract the preferred dividends from net income.2. Divide the result by the number of shares of common stock outstanding.To find the P/E Ratio:1. Divide the market price per share by the EPS calculated in the previous step.These calculations help investors understand the profitability and valuation of a company.---For interactive tools and detailed step-by-step instructions, please refer to the financial educational section on [Our Educational Website](#).

The ratio analysis is a quantitative analysis which tells about the operational efficiency of the…

Earnings per Share and Price-Earnings Ratio A company reports the following: Net income $829,000 Preferred dividends $47,000 Shares of common stock outstanding 85,000 Market price per share of common stock $104.88 a. Determine the company's earnings per share on common stock. Round your answer to the nearest cent. Use the rounded answer of requirement a for subsequent requirement, if required. b. Determine the company's price-earnings ratio. Round to one decimal place.

Earnings per Share and Price-Earnings Ratio A company reports the following: Net income $829,000 Preferred dividends $47,000 Shares of common stock outstanding 85,000 Market price per share of common stock $104.88 a. Determine the company's earnings per share on common stock. Round your answer to the nearest cent. Use the rounded answer of requirement a for subsequent requirement, if required. b. Determine the company's price-earnings ratio. Round to one decimal place.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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