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Homework: Chapter 15 HW B Save core: 0 of 1 pt 4 of 4 (3 complete) HW Score: 75%, 3 of 4 p D-21 (similar to) Question Help Da
er 15 HW B 4 of 4 (3 complete) stock ha ate i Data Table to e the 2018 2017 51,200 $ 40,700 Net Income Dividends-Comme 26,000
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Answer #1

Price/Earning ratio = Market Price per share of common stock/Earnings per share

2018 = 21.50/0.5

= 43 times

2017 = 15/0.35

= 42.86 times

Since P/E ratio has increased, attractiveness has increased

Note: EPS= (net Income – preferred dividend)/Number of common shares

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