Ask Question
BusinessBusiness
26 July, 19:30

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share. The price-earnings ratio is

+3
Answers (1)
  1. 26 July, 22:48
    0
    Earnings per share = Net income/No of ordinary shares outstanding

    Earnings per share = $250,000/50,000 share

    Earnings per share = 5

    Thus, Price-earnings ratio = Market price per share/Earnings per share

    Price-earnings ratio = $35/5

    Price-earnings ratio = 7

    Explanation:

    In this scenario, there is need to calculate earnings per share by dividing the net income by the number of common stock outstanding as shown above. Thereafter, we will now obtain the price-earnings ratio by dividing the market price per share by earnings per share.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Choose all that apply. Select all factors that affect salary. -capital gains -supply and demand -experience -taxes -education -skills -location
Answers (1)
The following data pertain to Babor Company for the fiscal year ended December 31: Prior December 31 Current December 31 Purchases of materials $ 197,500 Direct labor 130,250 Indirect labor 51,500 Factory insurance 9,300 Depreciation-factory 36,250
Answers (1)
In the context of managerial accounting, the relevant information is information that a. has been provided by the controller. b. must be analyzed by the chief financial officer before being provided to managers. c.
Answers (1)
Oscar pistorius sport personalites, descrition of the situation he faced that were negetively exploited by the media
Answers (1)
Ricardian equivalence means that: O changes in private savings offset any changes in the government deficit. O changes in exports offset any changes in the government deficit. O changes in imports offset any changes in the government deficit.
Answers (1)
New Questions in Business
New shoes are on sale you find a pair you like for $85 $45 with you so you pay $40 and charge the balance at 8% interest what was the balance owed be in six months
Answers (1)
Tresnan Brothers is expected to pay a $1.80 per share dividend at the end of the year (i. e., D1 5 $1.80). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs, is 10%.
Answers (1)
Dome Metals has credit sales of $180,000yearly with credit terms of net 60 days, which is also the average collection period. Dome does not offer a discount for early payment, so its customers take the full 60 dys to pay.
Answers (1)
Which of the following things does the affordable care act do
Answers (1)
An economic theory holding that the constant gradual expansion of the money supply is the key to a nation's economic health is
Answers (1)
Home » Business » Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share.
Sign Up Forgot Password?