Question

Stilley Corporation had earnings after taxes of $436,000 in 2013 with 200,000 shares outstanding. The stock price was $42.00. In 2014, earnings after taxes declined to $206,000 with the same 200,000 shares outstanding. The stock price declined to $27.80.
a. Compute earnings per share and the P/E ratio for 2013.
b. Compute earnings per share and the P/E ratio for 2014.
c. Give a general explanation of why the P/E changed. You might want to consult the textbook to explain this surprising result.



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  • CreatedOctober 14, 2014
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