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The following information relates to three companies in the same industry                                   Latest                  Earnings            Dividends Company          market price                per share           per share A                       $ 35                             $11                    $0 B                        $40                              $5                     $4 C                       $ 90                             $10                   $6 Required: Explain and calculate the price -earnings and dividend yield ratios. On the basis of only the foregoing information, which company represents the most attractive investment opportunity to you? Explain.

The following information relates to three companies in the same industry                                   Latest                  Earnings            Dividends Company          market price                per share           per share A                       $ 35                             $11                    $0 B                        $40                              $5                     $4 C                       $ 90                             $10                   $6 Required: Explain and calculate the price -earnings and dividend yield ratios. On the basis of only the foregoing information, which company represents the most attractive investment opportunity to you? Explain.

Essentials Of Investments
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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The following information relates to three companies in the same industry

                                  Latest                  Earnings            Dividends

Company          market price                per share           per share

A                       $ 35                             $11                    $0

B                        $40                              $5                     $4

C                       $ 90                             $10                   $6

Required: Explain and calculate the price -earnings and dividend yield ratios. On the basis of only the foregoing information, which company represents the most attractive investment opportunity to you? Explain.

 

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