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) 2.5

B) 70.4

C) 30.0

D) 28.1

Explanation / Answer

D) $28.1

2015 2014 Market Price $76 $76 Common shares 1793500 1793500 Cash dividend $1.08 $0.86 EPS $2.70 $2.53 $ $ PE Ratio 28.1 30.04 Stock price per share/EPS 76/2.7 76/2.53

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