Asked by
Sophie Nassem
on Nov 13, 2024
Verified
Blitzen Corporation had net income of $200000 and paid dividends to common stockholders of $50000 in 2017. The weighted average number of shares outstanding in 2017 was 40000 shares. Blitzen Corporation's common stock is selling for $35 per share on the New York Stock Exchange. Blitzen Corporation's price-earnings ratio is
A) 5.6 times.
B) 7 times.
C) 5 times.
D) 9.3 times.
Price-earnings Ratio
A valuation metric for a stock, calculated by dividing the current share price by the earnings per share.
Net Income
Net income represents the total earnings of a company after all expenses and taxes have been deducted from total revenue.
Common Stock
Shares of ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.
- Attain expertise in determining the earnings per share (EPS) and appreciate its importance in evaluating corporate profitability.
- Acquire knowledge on the employment of profitability indicators (profit margin, return on assets) for the assessment of total company performance.
Verified Answer
KS
Learning Objectives
- Attain expertise in determining the earnings per share (EPS) and appreciate its importance in evaluating corporate profitability.
- Acquire knowledge on the employment of profitability indicators (profit margin, return on assets) for the assessment of total company performance.