Answer:
a. 8.333
b. 9.334
c. 10.196
Step-by-step explanation:
a. To find price = earnings
R
price = 966,000
.12
price = $8,050,000
P/E ratio = price
earnings
P/E ratio = 8,050,000
966,000
P/E ratio = 8.3333
b. Price = new earnings + current earnings
R
Price = 116,000 + 966,000
.12
Price = 9,016,666.6666
P/E ratio = New Price
initial earnings
P/E ratio = 9,016,666.6666
966,000
P/E ratio = 9.334
c. Price = new earnings + current earnings
R
Price = 216,000 + 966,000
.12
Price = 9,850,000
P/E ratio = New Price
initial earnings
P/E ratio = 9,850,000
966,000
P/E ratio = 10.196