Question

3) e-Bay Inc. provides the following information for the year 2015: Net income Market price per share of common stock Common stock outstanding at Jan. 1, 2015 Common stock outstanding at Dec. 31, 2015 $340,000 $50 per share 125,000 shares 180,000 shares The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.

          3) e-Bay Inc. provides the following information for the year 2015:
Net income
Market price per share of common stock
Common stock outstanding at Jan. 1, 2015
Common stock outstanding at Dec. 31, 2015
$340,000
$50 per share
125,000 shares
180,000 shares
The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.

3) e-Bay Inc. provides the following information for the year 2015:
Net income
Market price per share of common stock
Common stock outstanding at Jan. 1, 2015
Common stock outstanding at Dec. 31, 2015
340,00050 per share
125,000 shares
180,000 shares
The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.

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Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

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Solved by Expert Benjamin Densmore

Step 1

EPS is calculated by dividing the net income by the number of common shares outstanding. Net income: $340,000 Common stock outstanding at Dec. 31, 2015: 180,000 shares EPS = Net income / Common stock outstanding EPS = $340,000 / 180,000 EPS = $1.89 per share Show more…

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3e-Bay Inc. provides the following information for the year 2015: Net income: $340,000 Market price per share of common stock: $50 per share Common stock outstanding at Jan. 1, 2015: 125,000 shares Common stock outstanding at Dec. 31, 2015: 180,000 shares The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.