Financial information for Forever 18 includes the following selected data:($ in millions) 2021 2020Net income $ 129 $ 308Dividends on preferred stock $ 20 $ 15Average shares outstanding 150 400Stock price $ 12.02 $ 10.97Required:1. Calculate earnings per share in 2020 and 2021. Did earnings per share increase in 2021?2. Calculate the price-earnings ratio in 2020 and 2021. In which year is the stock priced lower in relation to reported earnings?
Financial information for Forever 18 includes the following selected data:($ in millions) 2021 2020Net income $ 129 $ 308Dividends on preferred stock $ 20 $ 15Average shares outstanding 150 400Stock price $ 12.02 $ 10.97Required:1. Calculate earnings per share in 2020 and 2021. Did earnings per share increase in 2021?2. Calculate the price-earnings ratio in 2020 and 2021. In which year is the stock priced lower in relation to reported earnings?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Financial information for Forever 18 includes the following selected data:
($ in millions) 2021 2020
Net income $ 129 $ 308
Dividends on
Average shares outstanding 150 400
Stock price $ 12.02 $ 10.97
Required:
1. Calculate earnings per share in 2020 and 2021. Did earnings per share increase in 2021?
2. Calculate the price-earnings ratio in 2020 and 2021. In which year is the stock priced lower in relation to reported earnings?
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