Looking up a stock tip on Yahoo Finance that you received from your friend Lenny, you came across Cisco Incorporated. Reviewing their financials, you see that they paid $2.2 million in common stock dividends with only 10 million shares outstanding. Out of the $35 million in stockholder's equity $4.8 million was retained earnings. You feel that the price of the stock in the market today is reasonable at $9.00 per share. But Lenny always told you that you needed to figure out these four ratios before investing in any stock. So, you need to calculate: A) P/E Ratio. B) Book Value Per Share. C) Earnings Per Share. D) Market to Book Ratio.

Looking up a stock tip on Yahoo Finance that you received from your friend Lenny, you came across Cisco Incorporated. Reviewing their financials, you see that they paid $2.2 million in common stock dividends with only 10 million shares outstanding. Out of the $35 million in stockholder's equity $4.8 million was retained earnings. You feel that the price of the stock in the market today is reasonable at $9.00 per share. But Lenny always told you that you needed to figure out these four ratios before investing in any stock. So, you need to calculate: A) P/E Ratio. B) Book Value Per Share. C) Earnings Per Share. D) Market to Book Ratio.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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