Farrell Company has provided the following data: Common stock: Shares outstanding 30,000 Market value, December 31 $165,000 Book value, December 31 $90,000 Dividends paid $50,000 Preferred stock, 10%, $100 par $100,000 Net income $150,000 Interest on long-term debt $15,000 The price-earnings ratio is: A. 1.10 B. 1.18 C. 1.65 D. 1.83

Farrell Company has provided the following data: Common stock: Shares outstanding 30,000 Market value, December 31 $165,000 Book value, December 31 $90,000 Dividends paid $50,000 Preferred stock, 10%, $100 par $100,000 Net income $150,000 Interest on long-term debt $15,000 The price-earnings ratio is: A. 1.10 B. 1.18 C. 1.65 D. 1.83

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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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 market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
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