Ask Question
BusinessBusiness
30 September, 06:49

The Crestar Company reported net income of $112,000 on 20,000 average outstanding common shares. Preferred dividends total $12,000. On the most recent trading day, the preferred shares sold at $50 and the common shares sold at $95. What is this company's current price-earnings ratio?

+5
Answers (1)
  1. 30 September, 08:01
    0
    Price earnings ratio = 19 times.

    Explanation:

    Price earning ratio is calculated as for the common equity, as the earnings on preference share is fixed.

    Accordingly, the earnings for equity = Net income - preference dividend = $112,000 - $12,000 = $100,000

    Number of shares outstanding = 20,000

    Earnings per share = $100,000/20,000 = $5 per share.

    Selling price of the share = $95

    Thus, price earnings ratio = $95/$5 = 19 times.

    This reflects that the 19 times of earnings is the price of share.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The Crestar Company reported net income of $112,000 on 20,000 average outstanding common shares. Preferred dividends total $12,000. On the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Alice finds she no longer is able to pay premiums on her $50,000 Whole Life Policy, but needs that amount of protection for her family. Which non-forfeiture option provides this protection? a. fixed amountb. reduced paid-upc. paid-up optiond.
Answers (1)
At the scene of the crime, the evidence collector found a damp, bloody shirt. the evidence collector quickly wrapped the shirt in a paper bindle. he inserted the paper bindle with the shirt into an evidence bag.
Answers (1)
When ships carrying imported goods arrive at U. S. ports, customs officers are responsible for inspecting the goods and determining a. the quota that will be imposed. b. the restrictions that will be imposed. c. all of the above d.
Answers (1)
Susan Marciano invested part of her $ 24 comma 000 bonus in a fund that paid a 12 % profit and invest the rest in stock that suffered a 3 % loss. Find the amount of each investment if her overall net profit was $ 1 comma 680.
Answers (1)
You have just received notification that you have won the $2.16 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 64 years from now.
Answers (1)
New Questions in Business
A production line at V. J. Sugumaran's machine shop has three stations. The first station can process a unit in 5 minutes.
Answers (1)
What is the marginal rate of substitution (MRS) and why does it diminish as the consumer substitutes one product for another?
Answers (1)
Taylor product inc. distributed 100 million coupons in 2016. the coupons are redeemable for 30 cents each. taylor anticipates that 70% of the coupons will be redeemed. the coupons expire on december 31, 2017.
Answers (1)
What is a goal of federal minimum wage who benefits from it?
Answers (1)
ABC Hotels, Inc. has signed a service outsourcing contract with XYZ Rooms, Inc. for $5 million, which was received in cash at contract inception.
Answers (1)
Home » Business » The Crestar Company reported net income of $112,000 on 20,000 average outstanding common shares. Preferred dividends total $12,000. On the most recent trading day, the preferred shares sold at $50 and the common shares sold at $95.
Sign Up Forgot Password?