Botox Facial Care had earnings after taxes of $350,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $72.50. In 20X2, earnings after taxes increased to $420,000 with the same 200,000 shares outstanding. The stock price was $83.00. a. Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.) (Do not round intermediate calculations. Round your final answers to 2 decimal places.) b. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) c. Why did the P/E ratio change
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Ответ:
a. Compute earnings per share and the P/E ratio for 20X1.
EPS = $1.75 per stock
P/E ratio = 41.43
b. Compute earnings per share and the P/E ratio for 20X2.
EPS = $2.10 per stock
P/E ratio = 39.52
Explanation:
after taxes net income $350,000 in 20x1
200,000 outstanding common stocks
stock price $72.50
after taxes net income $420,000 in 20x2
200,000 outstanding common stocks
stock price $83.00
EPS = net income / outstanding stocks
20x1 = $350,000 / 200,000 = $1.75 per stock
20x2 = $420,000 / 200,000 = $2.10 per stock
P/E ratio = stock price / EPS
20x1 = $72.50 / $1.75 = 41.43
20x2 = $83.00 / $2.10 = 39.52
Ответ: