Question

That Wich Corp. had additions to retained earnings for the year just ended of $362,624. The firm paid out $226,257 in cash dividends, and it has ending total equity of $4,614,400. The company currently has 150,000 shares of common stock outstanding. If the stock currently sells for $73 per share, what is the price-earnings ratio?

Answer 1

price earning ratio = 18.62 time

Step-by-step explanation:

given data

earning = $362624

dividends = $226257

total equity = $4614400

common stock = 150000 shares

currently sells = $73 per share

to find out

price earning ratio

solution

we know that price earning ratio =
`(market price)/(earning per share)` ...........................1

here market price is $73 per share and

earning per share is =
`(earning +dividends)/(common stock)`

earning per share =
`(362624 + 226257)/(150000)`

earning per share = 3.92 per share

so from equation 1

price earning ratio =
`(73)/(3.92)`

price earning ratio = 18.62 time