Question

Name	Company A
Symbol	Company A
Close	$56.50
Day Range	$52.75 - $62.00
52-Week Range	$43.90 - 65.50
Volume	8.2 million
P/E	26.48
Dividend	$2.12
Dividend Yield
EPS

1. What is the price earnings ratio for company A?
   
   
2. What is the earnings per share for company A?
   
   
3. If you are investing in a company, do you want the EPS to be high or low? Why or why not?
   
4. What is the dividend yield for company A?
   
   
5. If you currently own 16,500 shares, what is the total dividend received?

6. You choose to place the dividend amount received (#4) into a savings account that compounds daily at 3.75% interest. What is the balance of this account after five years?

Answer 1

A

Price to Earnings ratio (P/E ratio) of A is 26.48

B.

Close Price of stock = 56.50

P/E Ratio = Price/EPS = 26.48

56.5/EPS = 26.48

56.50/26.48= EPS

EPS =2.133685801

So Earning per share is $2.13

C.

We always sant that Company earn more profits and Earnings. When more Earnings will be there, more EPS will be and More EPS means higher valuation of stock and higher Net worth of shareholders.

So we always want EPS to be higher.

D

Dividend for Company A = 2.12

Dividend Yield formula = Dividend/Price

=2.12/56.50

=0.03752212389 or 3.75%

So Dividend Yield is 3.75%

E. Dividend Received Total = Dividend per share*Number Of share

=2.12*16500

=34980

So Dividend Received is $34980

F.

Amount invested or Present Value = 34980

Interest rate per day (i)= 3.75%/365=0.000102739726

Days in 5 Year (n)= 5*365=1825

Future Value formula = PV*(1+i)^n

=34980*(1+0.000102739726)^1825

42193.52775

So Balance at end will be $42193.53