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23 May, 16:27

Mustaine, inc., has a current stock price of $54. for the past year, the company had net income of $7,900,000, total equity of $26,300,000, sales of $50,500,000, and 4.1 million shares of stock outstanding. requirement 1: what are earnings per share? (do not round intermediate calculations. round your answer to 2 decimal places (e. g., 32.16).) earnings per share $ 1.93 requirement 2: what is the price-earnings ratio?

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  1. 23 May, 20:06
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    (a) Earnings per share = Net income / total number of shares

    Net Income = 7,900,000

    Total number of shares = 4.1 Million = 4,100,000

    Earnings per share = 7,900,000/4,100,000 = $1.9268/share

    Earnings per share = $1.93/share (Rounded to 2 decimals)

    (b) Price earnings ratio = Price per share / Earnings per share

    Price per share = $54

    Earnings per share = $1.9268

    Price earnings ratio = 54/1.9268 = 28.03
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