price as at 31 December R9.05 R5.12 Earnings per share for the year to 31 December R0.65 R0.38 Dividend per share for the year to 31 December R0.17 R.30 Required: a) i) calculate the P/E ratio and the dividend yield for RR at 31 December 2021 and comparative figures for 2020. ii) Analyse the financial information for RR from the viewpoint of an investor.  b) Explain the limitations that would exist if you were to compare these ratios and market information for RR with that of an entity whose shares were listed on a stock exchange in a differe

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 82E
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The following information is available for entity RR:
2021 2020
Share price as at 31 December R9.05 R5.12
Earnings per share for the year to 31 December R0.65 R0.38
Dividend per share for the year to 31 December R0.17 R.30
Required:
a) i) calculate the P/E ratio and the dividend yield for RR at 31 December 2021 and comparative figures for 2020.
ii) Analyse the financial information for RR from the viewpoint of an investor. 
b) Explain the limitations that would exist if you were to compare these ratios and market information for RR with that of an entity whose shares were listed on a stock exchange in a different country.

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