Redwood Enterprises has a net income of $1,200,000, and its weighted average common shares outstanding are 250,000. The company's dividend per share is $2.00, its market price per share is $150, and its book value per share is $135. What is its price-earnings ratio?

Redwood Enterprises has a net income of $1,200,000, and its weighted average common shares outstanding are 250,000. The company's dividend per share is $2.00, its market price per share is $150, and its book value per share is $135. What is its price-earnings ratio?

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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Question

I am looking for the most effective method for solving this financial accounting problem.

Redwood Enterprises has a net income of $1,200,000,
and its weighted average common shares outstanding
are 250,000. The company's dividend per share is
$2.00, its market price per share is $150, and its book
value per share is $135. What is its price-earnings
ratio?

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