Please provide the solution to this financial accounting question with accurate financial calculations. Financial Accounting:If a stock's P/E ratio is 16.2 at a time when earningsare $3.50 per year and the dividend payout ratio is45%, what is the stock's current price?a. $56.70b. $63.00c. $45.20d. $58.30

Provided Data:Price-to-Earnings (P/E) Ratio = 16.2Earnings per Share (EPS) = $3.50Dividend Payout…

Answered: Financial Accounting: If a stock's P/E…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.
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Selected information for Berry Company is as follows: Berrys return on equity rounded to the nearest percentage point is: a. 20%. c. 28%. b. 21%. d. 40%.
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Financial Accounting: If a stock's P/E ratio is 18.5 at a time when earnings are $4 per year and the dividend pay- out ratio is 40%, what is the stock's current price? a. $24.30 b. $18.00 c. $74.00 d. $40.50
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Financial Accounting: If a stock's P/E ratio is 16.2 at a time when earnings are $3.50 per year and the dividend payout ratio is 45%, what is the stock's current price? a. $56.70 b. $63.00 c. $45.20 d. $58.30