7. Stock quotes Smith Enterprises recently was profiled on a financial informati

Question

7. Stock quotes Smith Enterprises recently was profiled on a financial information website and touted as a "hot" growth stock. You acquired the stock quote shown below from that website. Smith Enterprises (NYSE: SME) Last Trade: Trade Time: Change: Prev Close: Open: Bid: Ask: 1y Target Est 55.40 $51.63 4:00 PM ET t??? (11.58%) 46.27 47.25 N/A N/A Day's Range 47.22 - 51.96 52wk Range: 25.48 - 60.71 Volume: Avg Vol (3m): 1,921,518 Market Cap: P/E (ttm): EPS (ttm): Div & Yield: 1,419,317 1.63B 25.43 0.20 (0.40%) The last trade time is shown to be at 4:00 PM Eastern Time. The abbreviation "ttm" stands for "trailing twelve months," and the number shown reflects data from the previous 12 months. The abbreviation "3m" reflects data from the previous 3 months.

Explanation / Answer

Answer 1 PE ratio = Stock price / EPS Hence EPS = stock price / PE ratio EPS = 51.63 / 25.43 = 2.03 EPS = 2.03 Answer 2 Yesterday's closing price = $46.27 Today's closing price = $51.63 Price increase = 51.63 - 46.27 = $5.36 Answer 3 Relatively light trading of Smith's stock today relative to normal level of trading.

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