Use the following information to answer this question. Windswept, Ino 2017 Incom

Question

Use the following information to answer this question. Windswept, Ino 2017 Income Statement (s in millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes Net income $9,950 7,900 365 $1,685 98 $1,587 476 Windswept, Inc. 2016 and 2017 Balance Sheets (s in millions) 2016 2017 2017 $1,540 $1,812 1,060 1,248 3,340 3,020 890 2016 Cash Accounts rec. Inventory Total Net fixed assets Total assets $ 270 290 Accounts payable 1,090 1,760 1,650 Common stock 990 Long-term debt $3,120 $2,930 Retained earnings 640 3,460 4,040 $6,580 $6,970 Total 1iab. &equity $6,580 $6,970 Windswept, Inc., has 540 million shares of stock outstanding. Its price-earnings ratio for 2017 is 15. What is the market price per share of stock?

Explanation / Answer

Earning per share = Net income/Number of outstanding shares

= 1,111 million/540 million

= $2.057

Price earning ratio = Market price per share/Earning per share

15 = Market price per share/2.057

Market price per share = 15 x 2.057

= $30.86

Hence,correct option is (b)

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