Question

Flex Co. just paid total dividends of $800,000 and reported additions to retained earnings of $2,400,000....

Flex Co. just paid total dividends of $800,000 and reported additions to retained earnings of $2,400,000. The company has 605,000 shares of stock outstanding and a benchmark PE of 16.2 times. What stock price would you consider appropriate?

Homework Answers

Answer #1
Given Dividend paid= $800,000
Additional Retained Earnings= $2,400,000
P/E Ratio 16.2
Total shares outstanding 605000
Solution
Dividend paid= $800,000
Add: Additional Retained Earnings= $2,400,000
Total Earnings/Net Income= $3,200,000
P/E Ratio= Market Price/Earning
16.2= Market Price/3200000
So, Total Market Price = 3200000*16.2
= $ 51,840,000
Price per stock= Total Market Price/total number of shares outstanding
= 51840000/605000
= $                    85.69
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
SRC Inc. had additions to retained earnings for the year just ended of $515,333. The firm...
SRC Inc. had additions to retained earnings for the year just ended of $515,333. The firm paid out $150,000 in cash dividends and it has ending total equity of $5 million. The firm has 530,091 shares outstanding. The current price is $55 per share. Calculate earnings per share. Format your answer with 2 decimals, for example, 1.34. 2. SRC Inc. had additions to retained earnings for the year just ended of $558,557. The firm paid out $150,000 in cash dividends...
Rossdale, Inc., had additions to retained earnings for the year just ended of $632,000. The firm...
Rossdale, Inc., had additions to retained earnings for the year just ended of $632,000. The firm paid out $95,000 in cash dividends, and it has ending total equity of $7.27 million. If the company currently has 640,000 shares of common stock outstanding, what are earnings per share? Dividends per share? What is book value per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Earning per share $ ___ Dividends per share $...
anitou Corp. had additions to retained earnings for the year just ended of $359,000. The firm...
anitou Corp. had additions to retained earnings for the year just ended of $359,000. The firm paid out $181,000 in cash dividends, and it has ending total equity of $5.36 million. The company currently has 150,000 shares of common stock outstanding. What are the earnings per share? (Round the final answer to 2 decimal places. Omit $ sign in your response.) Earnings           $  per share What are the dividends per share? (Round the final answer to 2 decimal places. Omit...
Makers Corp. had additions to retained earnings for the year just ended of $301,000. The firm...
Makers Corp. had additions to retained earnings for the year just ended of $301,000. The firm paid out $179,000 in cash dividends, and it has ending total equity of $4.84 million. The company currently has 150,000 shares of common stock outstanding.    What are earnings per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)       Earnings $  per share    What are dividends per share? (Do not round intermediate calculations and round...
ABC, Inc. reported retained earnings for the year just ended of $638,000. The firm paid out...
ABC, Inc. reported retained earnings for the year just ended of $638,000. The firm paid out $65,000 in cash dividends, and it has ending total equity of $7.33 million. a. If the company currently has 700,000 shares of common stock outstanding, what are earnings per share? Dividends per share? What is book value per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If the stock currently sells for $30.30 per share,...
Please show how it would be done on EXCEL the sleeping flower CO has earnings of...
Please show how it would be done on EXCEL the sleeping flower CO has earnings of $2.65 per share. The benchmark PE for the company is 18. What stock price would you consider appropriate ? what if the benchmark PE were 21?
Makers Corp. had additions to retained earnings for the year just ended of $261,000. The firm...
Makers Corp. had additions to retained earnings for the year just ended of $261,000. The firm paid out $194,000 in cash dividends, and it has ending total equity of $4.99 million. The company currently has 130,000 shares of common stock outstanding.    a. What are earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are dividends per share? (Do not round intermediate calculations and round your answer to 2...
Makers Corp. had additions to retained earnings for the year just ended of $261,000. The firm...
Makers Corp. had additions to retained earnings for the year just ended of $261,000. The firm paid out $194,000 in cash dividends, and it has ending total equity of $4.99 million. The company currently has 130,000 shares of common stock outstanding.    a. What are earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are dividends per share? (Do not round intermediate calculations and round your answer to 2...
Pagemaster just reported earnings of $2 million. They are retaining 40% of those earnings ($800,000), and...
Pagemaster just reported earnings of $2 million. They are retaining 40% of those earnings ($800,000), and paying out 60% as a dividend. The historical ROE for the firm is 16% per year and the company has 1,000,000 shares outstanding selling at $10 per share. What is the required return ("r") for Pagemaster?
The Blooming Flower Co. has earnings of $2.10 per share. The benchmark PE for the company...
The Blooming Flower Co. has earnings of $2.10 per share. The benchmark PE for the company from a comparables analysis is 10. What stock price would you consider appropriate? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Stock price           $   What if the benchmark PE were 13? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Stock price           $