Question

McDaniel Corporation had net income for 2016 of $82,000. McDaniel had 12,000 shares of common stock...

McDaniel Corporation had net income for 2016 of $82,000. McDaniel had 12,000 shares of common stock outstanding at the beginning of the year and 26,000 shares of common stock outstanding at the end of the year. There were 9,000 shares of preferred stock outstanding all year. During​ 2016, McDaniel declared and paid preferred dividends of $26,000. On December​ 31, 2106, the market price of​ McDaniel's common stock is $46 per share and the market price of its preferred stock is $78 per share. What is​ McDaniel's price/earnings​ ratio? (Round any intermediate calculations and your final answer to the nearest​ cent.)

A.18.07

B.26.44

C.15.59

D.14.59

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
McDaniel Corporation
Avg. # of Common shares outstanding: (12,000 + 26,000) / 2 = 19,000
Earnings per share = (Net income – preferred dividends) Avg. # of common shares outstanding
Earnings per share = ($82,000 - $26,000) / 19,000 = 2.95
Earnings per share = $2.95
Price / earnings ratio = Market price per share of common stock / earnings per share
Price/ earnings ratio = $46 / $2.95 = 15.59
Answer : C.15.56
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
NEZNEZ Corporation had net income for 2018 of $36,500. NEZNEZ had 1,800 shares of common stock...
NEZNEZ Corporation had net income for 2018 of $36,500. NEZNEZ had 1,800 shares of common stock outstanding at the beginning of the year and 24,200 shares of common stock outstanding as of December​ 31, 2018. During the​ year, NEZNEZ declared and paid preferred dividends of $20,250. Compute NEZNEZ​'s earnings per share. Select the​ formula, then enter the amounts to calculate NEZNEZ ​Corporation's earnings per share as of December​ 31, 2018. ​(Abbreviations used: Ave.​ = average, OS​ = outstanding, SE​ =...
At December 31, 2017, Albrecht Corporation had outstanding 313,000 shares of common stock and 12,000 shares...
At December 31, 2017, Albrecht Corporation had outstanding 313,000 shares of common stock and 12,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2018, Albrecht sold for cash 12,000 shares of its common stock. No cash dividends were declared for 2018. For the year ended December 31, 2018, Albrecht reported a net loss of $1,006,000. Required: Calculate Albrecht's net loss per share for the year ended December 31, 2018. (Enter your answers in thousands. Negative...
A company earned net income of $1,500,000 in 2019 and had 150,000 shares of common stock...
A company earned net income of $1,500,000 in 2019 and had 150,000 shares of common stock outstanding on January 1, 2019. The tax rate is 20% and the common stock sold at an average market price of $24 per share during the period. The company had the following transactions affecting common shares outstanding during the year: • Issued 50,000 shares of common stock on March 1, 2019 • Repurchased 5,000 shares of common stock on June 1, 2019 • Had...
On January 1, 2018, Edward Corporation had 12,000 shares of $4 par value common stock and...
On January 1, 2018, Edward Corporation had 12,000 shares of $4 par value common stock and 12,000 shares of 5%, $100 par value convertible preferred stock outstanding. The preferred shares carried a 3-for-1 conversion privilege. On October 1, 2018, all of the preferred shares were converted to common. What number of shares must Edward use in computing basic earnings per share at December 31, 2018? 9,000. 21,000. 48,000. 12,000.
A corporation, which had 12,000 shares of common stock outstandingdeclared a 6-for-1 stock split. What will...
A corporation, which had 12,000 shares of common stock outstandingdeclared a 6-for-1 stock split. What will be the number of shares outstanding after the split? ) If the common stock had a market price of $240 per share before the stock split, what would be an approximate market price per share after the split?
Throughout 2015, Smith had 150,000 shares of common stock outstanding. Smith's net income for the year...
Throughout 2015, Smith had 150,000 shares of common stock outstanding. Smith's net income for the year ended December 31, 2015 was $800,000. Smith's income tax rate is 20%. During 2015, Smith declared and paid dividends on its 10,000 shares of 6% convertible preferred $100 par value stock. Each share of the convertible preferred stock can be converted, at the discretion of the stockholder, into 3 shares of Smith's common stock. During the entire year ending 12-31-15, Smith had 15,000 outstanding...
AAA corp reported net income of $230,000 and had 400,000 shares of common stock outstanding for...
AAA corp reported net income of $230,000 and had 400,000 shares of common stock outstanding for the whole year. The firm had 2,000 shares of 10%, 100 par, preferred stock outstanding for the year. Each share of preferred is convertible to 40 shares of common. During the year, it issued 1,200 $1,000 par value, 7% bonds. Each bond is convertible to 100 shares of common. The firm has 20,000 stock options outstanding, and each option allows the holder to purchase...
Arquandt Company's net income last year was $550,000. The company has 150,000 shares of common stock...
Arquandt Company's net income last year was $550,000. The company has 150,000 shares of common stock and 50,000 shares of preferred stock outstanding. There was no change in the number of common or preferred shares outstanding during the year. The company declared and paid dividends last year of $1.20 per share on the common stock and $1.70 per share on the preferred stock. The earnings per share of common stock are closest to: a $2.47. b $3.10. c $6.67. d...
On December 31, 2015, Dow Steel Corporation had 650,000 shares of common stock and 35,000 shares...
On December 31, 2015, Dow Steel Corporation had 650,000 shares of common stock and 35,000 shares of 9%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 5% common stock dividend on May 15 and paid cash dividends of $450,000 and $74,000 to common and preferred shareholders, respectively, on December 15, 2016. On February 28, 2016, Dow sold 64,000 common shares. Also, as a part of a 2015 agreement for the acquisition of Merrill Cable Company, another 26,000 shares...
Weaver Corporation had the following stock issued and outstanding at January 1, Year 1: 124,000 shares...
Weaver Corporation had the following stock issued and outstanding at January 1, Year 1: 124,000 shares of $12 par common stock. 9,000 shares of $90 par, 4 percent, noncumulative preferred stock. On June 10, Weaver Corporation declared the annual cash dividend on its 9,000 shares of preferred stock and a $3 per share dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20. Required a. Determine the total amount...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT