Question

An investor is trying to decide whether to invest in the long-term bonds and common stock of Mayer Company and Matthews Company. Both companies operate in the same industry. Both also pay a dividend per share of $8 and have a yield of 10 percent on their long-term bonds. Other data for the two companies are as follows:


Compute the debt to equity, interest coverage, and price/earnings (P/E) ratios as well as the dividends yield and comment on the results. (Note: Round computations to one decimalplace.)


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  • CreatedSeptember 10, 2014
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