Financial information for Forever 18 includes the following selected data:   ($ in millions) 2024 2023 Net income $160 $171 Dividends on preferred stock $22 $17 Average shares outstanding 250 300 Stock price $11.92 $10.87 2-a. Calculate the price-earnings ratio in 2023 and 2024. 2-b. In which year is the stock priced lower in relation to reported earnings?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Financial information for Forever 18 includes the following selected data:
 

($ in millions) 2024 2023
Net income $160 $171
Dividends on preferred stock $22 $17
Average shares outstanding 250 300
Stock price $11.92 $10.87

2-a. Calculate the price-earnings ratio in 2023 and 2024.

2-b. In which year is the stock priced lower in relation to reported earnings?

 

 

 

Req 2a
Req 2b
Calculate the price-earnings ratio in 2023 and 2024. (Enter your price-earnings ratio values to two decimal places. Enter your
answers in millions (i.e. 5,550,000 should be entered as 5.55).)
Price-Earnings Ratio
Numerator/Denominator
Amounts
2023
2024
Req 2a
Req 2b
II
II
Transcribed Image Text:Req 2a Req 2b Calculate the price-earnings ratio in 2023 and 2024. (Enter your price-earnings ratio values to two decimal places. Enter your answers in millions (i.e. 5,550,000 should be entered as 5.55).) Price-Earnings Ratio Numerator/Denominator Amounts 2023 2024 Req 2a Req 2b II II
Req 2a
Req 2b
In which year is the stock priced lower in relation to reported earnings?
In which year is the stock priced lower in relation to reported earnings?
Req 2a
Req 2b
Transcribed Image Text:Req 2a Req 2b In which year is the stock priced lower in relation to reported earnings? In which year is the stock priced lower in relation to reported earnings? Req 2a Req 2b
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