ect CengageNOWv21 Assig, × \\ D Cengage learning d.edu/courses/26450/quizzes/138

Question

ect CengageNOWv21 Assig, × D Cengage learning d.edu/courses/26450/quizzes/138882/take on the bookmarks bar. Import bookmarksnow.. Question 11 5 pts 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 O 7 times 14 times 2 times 5 times No new data to save. Last checked at 10:36pm Submit Quiz OI

Explanation / Answer

Price Earning Ratio= Market price of share/Earning per share (EPS)

Market Price of Share=$35 (Given in Problem)

EPS= Net Income/Number of share=$250000/50000=$5

Hence Price Earnng Ratio=$35/$5= 7 times (that means first option is correct)

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