Question 16 Gnomes R Us just paid a dividend of $1.89 per share. The company has...

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Answer 1

Answer #1

DIvidend paid =$1.89

Payout ratio =65%

From this we can calculate earnings per share

Earnings per share = Dividend / payout ratio

Earnings per share =1.89/0.65

Earnings per share =2.90769

PE ratio = Market price / Earnings per share

substituting values we get

16.8 = Market Price / 2.90769

Market Price = 16.8 x 2.90769

Market Price = 48.85

Therefor the stock price is $48.85

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Answer 2

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Question 16 Gnomes R Us just paid a dividend of $1.89 per share. The company has...

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Add Answer to: Question 16 Gnomes R Us just paid a dividend of $1.89 per share. The company has...

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