Question

Do the Math 14-1

Numerical Measures

A stock sells at $25 per share.

What is the EPS for the company if it has a P/E ratio of 25?
Round your answer to the nearest cent.

$ _____

If the company’s dividend yield is 3 percent, what is its
dividend per share? Round your answer to the nearest cent.

$ ______

What is the book value of the company if the price-to-book
ratio is 2.5 and it has 200,000 shares of stock outstanding? Round
your answer to the nearest dollar.

$ ______

Answer #1

Price Earning Ratio (PE Ratio) = 25 and Market Price Per Share (MPS) = 25

PE Ratio = MPS / EPS

25 = 25 / EPS , So **EPS =$1**

Dividend Yield = 3%

Dividend Yield = (DPS / MPS) * 100

3 = (DPS / 25) * 100

**DPS =
$0.75**

Price to book ratio = 2.5

Price to book ratio = Market Price Per Share / Book value per share

2.5 = 25 / BVPS

BVPS = 10

No. of shares outstanding = 200,000

Book Value = 200,000 * 10 = **$2,000,000**

**(if any query, please comment, I will reply in the
comments)**

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