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24 votes
24 votes
In June 2007 General Motors (GM) posted a price-earnings ratio of 9.84. If

the price of the stock at that time was $36 per share, which of the following
must have been true?
a. GMâs earnings per share was 3.66.
b. GMâs coupon payment was $35 per year.
c. GMâs dividend yield for the year was 26%.
d. GMâs revenues that month were $366 million.

User Elliottregan
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1 Answer

27 votes
27 votes

Answer:

General Motors (GM)

If the price of the stock at that time was $36 per share, the true statement is:

a. GM's earnings per share was 3.66.

Step-by-step explanation:

a) Data and Calculations:

Price-earnings ratio = 9.84

Market price of stock at that time = $36 per share

Earnings per share = Market price per share/Price-earnings ratio

= $36/9.84 = 3.659

= $3.66

Check:

Price-earnings ratio = Market price per share/Earnings per share

= 9.84 ($36/$3.66)

User Andreas Ka
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