Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Financial information for Forever 18 includes the following selected data (in millions):
($ in millions) 2018
2017
Net income
$243 $252
Dividends on preferred stock $30
$25
Average shares outstanding (in millions) $300 $350
Stock price
$11.77 $10.72
Calculate the price-earnings ratio in 2017 and 2018. Farrell Company has provided the following data:
Common stock:
Market value, December 31
Shares outstanding
Book value, December 31
30,000
$165,000
$90,000
Dividends paid $50,000
Preferred stock, 10%, $100 par $100,000
Net income $150,000
Interest on long-term debt
The price-earnings ratio is:
$15,000
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Transcribed Image Text:Financial information for Forever 18 includes the following selected data (in millions): ($ in millions) 2018 2017 Net income $243 $252 Dividends on preferred stock $30 $25 Average shares outstanding (in millions) $300 $350 Stock price $11.77 $10.72 Calculate the price-earnings ratio in 2017 and 2018. Farrell Company has provided the following data: Common stock: Market value, December 31 Shares outstanding Book value, December 31 30,000 $165,000 $90,000 Dividends paid $50,000 Preferred stock, 10%, $100 par $100,000 Net income $150,000 Interest on long-term debt The price-earnings ratio is: $15,000
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