Financial Accounting:If a stock's P/E ratio is 18.5 at a time whenearnings are $4 per year and the dividend pay-out ratio is 40%, what is the stock's current price?a. $24.30b. $18.00c. $74.00d. $40.50

To solve the problem, we use the formula for calculating the price of the stock based on the P/E…

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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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