The balance sheets at the end of each of the first two years of operations indic

Question

The balance sheets at the end of each of the first two years of operations indicate the following: 2006 2005 Total current assets $600,000 $560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 150,000 80,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in capital in excess of par-common stock 60,000 60,000 Retained earnings 325,000 210,000 If net income is $115,000 and interest expense is $30,000 for 2006, and the market price is $30, What is the price-earnings ratio on common stock for 2006. (round to one decimal point)?

Explanation / Answer

115000-9000/ 60000 =1.77 then 30/1.77 =17 is the PE ratio

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.