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Tito Corporation had net income of $2,000,000 and paid dividends to common stockholders of $300,000 in 2017. The weighted average number of shares outstanding in 2017 was 400,000 shares. Tito Corporation's common stock is selling for $50 per share on the NASDAQ. Tito Corporation's price-earnings ratio is:_________

a. 10 times.
b. 4 times.
c. 12.5 times.
d. 3 times.

Respuesta :

Answer:

a. 10 times

Explanation:

The computation of price-earnings ratio is shown below:-

Earning per share = Net income ÷ Weighted average shares outstanding

= $2,000,000 ÷ 400,000

= 5

Price earning per share = Market price per share ÷ Earning per share

= $50 ÷ 5

= 10 times

Therefore for computing the price earning per share we simply applied the above formula.

PRIVATEDANK

Answer:

might be d

Explanation:

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