Foundations of Financial Management
Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 2, Problem 18P

Botox Facial Care had earnings after taxes of $370,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $31 .50 . In 20X2, earnings after taxes increased to $436,000 with the same 200,000 shares outstanding. The stock price was $42 .00

a. Compute earnings per share and the P/E ratio for 20X1. The P/E ratio equals the stock price divided by earnings per share.

b. Compute earnings per share and the P/E ratio for 20X2.

c. Give a general explanation of why the P/E ratio changed.

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Botox Facial Care had earnings after taxes of $320,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $39.80. In 20X2, earnings after taxes increased to $388,000 with the same 200,000 shares outstanding. The stock price was $50.00.a. Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.) (Do not round intermediate calculations. Round your final answers to 2 decimal places.)       b. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)         c. Why did the P/E ratio change? (Do not round intemediate calculations. Input your answers as percents rounded to 2 decimal places.)
Botox Facial Care had earnings after taxes of $284,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $45.80. In 20X2, earnings after taxes increased to $350,000 with the same 200,000 shares outstanding. The stock price was $56.00.a. Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.)
Boston Facial Care had earnings after taxes of $282,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $81.80. In 20X2, earnings after taxes increased to $418,000 with the same 200,000 shares outstanding. The stock price was $94.00. 6. Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.) (Do not reund intermediate calculations. Round your final answers to 2 decimal places.) Earrings per share b. Compute eamings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Earings per share P/E ratio times The stock price times 3. Why did the P/E ratio change? (Do not round intermediate calculations. Input your answers as percents rounded to 2 decimal places) percent white EPS percent. PLAY Next >

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Foundations of Financial Management

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