Ask Question
27 August, 21:30

During the year, Blitzen Corporation had net income of $200,000, paid $40,000 in dividends to common stockholders, and paid $50,000 in dividends to preferred shareholders. The weighted average number of shares outstanding for the year was 40,000 shares, and Blitzen Corporation's common stock was selling for $35 per share on the New York Stock Exchange at the end of the year. Blitzen Corporation's price-earnings ratio is Select one: a. 5 times. b. 12.73 times. c. 7 times. d. 8.75 times. e. 9.33 times.

+4
Answers (1)
  1. 27 August, 21:49
    0
    e. 9.33 times

    Explanation:

    Data provided as per the given question

    Price of share = $200,000 and $50,000

    Earning per share = $40,000

    The calculation of price-earnings ratio is shown below:-

    Price earning ratio = Price of share : Earning per share

    = ($200,000 - $50,000) : $40,000

    = $3.75 per share

    Therefore price earning ratio

    = $35 : $3.75

    = 9.33 times
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “During the year, Blitzen Corporation had net income of $200,000, paid $40,000 in dividends to common stockholders, and paid $50,000 in ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers