Question

Wilson, Inc., has a current stock price of $46.00. For the past year, the company had net income of $6,800,000, total equity of $21,690,000, sales of $40,100,000, and 5.2 million shares of stock outstanding.

1. What are eamings per share (EPS)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16.)
2. What is the price-eamings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

1. What are eamings per share (EPS)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16.)

Answer: $ 1.31 / share

2. What is the price-eamings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer: 35.11

Step-by-step explanation:

Earning Per Share (EPS) = Net Income - Preferred dividends / Outstanding Number of Share

Earning Per Share (EPS) = $6,800,000 - 0 / 5,200,000 shares

Earning Per Share (EPS) = $6,800,000 / 5,200,000 shares

Earning Per Share (EPS) = $1.31 / share

Price earning ratio = Share price / Earning per share

Price earning ratio = $46 per share / $1.31 per share

Price earning ratio = $46 / $1.31

Price earning ratio = 35.11