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Sheridan Corporation had net income of $204000 and paid dividends to common stockholders of $41000 in...

Sheridan Corporation had net income of $204000 and paid dividends to common stockholders of $41000 in 2017. The weighted average number of shares outstanding in 2017 was 50000 shares. Sheridan Corporation's common stock is selling for $61.20 per share on the New York Stock Exchange. Sheridan Corporation's price-earnings ratio is

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Answer #1

EPS=net income/weighted average number of shares outstanding

=204,000/50,000 shares

=4.08 per share

PE ratio=Market price/EPS

=61.2/4.08

=15

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