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14 February, 02:57

Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after-tax earnings of $9,216,000 and has issued 5,120,000 shares of common stock. The stock is currently selling for $33 a share. a. Calculate the earnings per share for National Computers. (Round your final answer to 2 decimal places.) Earnings per share $b. Calculate the price-earnings (PE) ratio for National Computers. (Use the rounded earnings per share from part a. Round your final answer to 2 decimal places.) Price-earnings ratio

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  1. 14 February, 05:15
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    a. $1.80

    b. 18.33 times

    Explanation:

    The computation of the earning per share is shown below:

    a. Earning per share = (Net income after tax) : (Number of shares)

    = ($9,216,000) : (5,120,000 shares)

    = $1.80

    b. And, the Price-earnings ratio = (Market price per share) : (Earning per share)

    = $33 : $1.80

    = 18.33 times
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Home » Business » Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after-tax earnings of $9,216,000 and has issued 5,120,000 shares of common stock.
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