MusicPod\'s earnings per share ratios were $2.70 and $2.53 respectively for 2015

Question

MusicPod's earnings per share ratios were $2.70 and $2.53 respectively for 2015 and 2014. MusicPod's stock was trading at $76 and $76.00 per share at the end of 2015 and 2014 respectively. The company paid cash dividends per share of $1.08 in 2015 and $0.86 in 2014. Total stockholders' equity was $13,802 million and $12,126 million in 2015 and 2014 respectively. The common shares outstanding were approximately 1,793,500 in both 2015 and 2014. MusicPod's price/earnings ratio for 2015 is closest to:

A. 30.0

B. 70.4

C. 28.1

D. 2.5

Explanation / Answer

EPS 2.7 MPS 76 PE Ratio = MPS/ EPS = 76/2.7 = 28.1 Price Earning Ratio for 2015 is 28.1 The correct answer is C. 28.1

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