Listed here are data for five companies. These data are from companies annual reports for the fiscal
Question:
Required
a. Compute the earnings per share (EPS) for each company.
b. Compute the P/E ratio for each company.
c. Using the P/E ratios, rank the companies stock in the order that the stock market appears to value the companies, from most valuable to least valuable. Identify reasons the ranking based on P/E ratios may not represent the markets optimism about one or two companies.
d. Compute the book value per share for each company.
e. Compare each companys book value per share to its market price per share. Based on the data, rank the companies from most valuable to least valuable. (The higher the ratio of market value to book value, the greater the value the stock market appears to be assigning to a companysstock.)
Step by Step Answer:
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward