Question: Selected data for Koch Company for 2007 and additional information on industry averages follow. Industry averages Earnings per share ... $ 5.20 Price-earnings ratio ....

Selected data for Koch Company for 2007 and additional information on industry averages follow.

Industry averages
Earnings per share ... $ 5.20
Price-earnings ratio .... 9.50
Return on equity ... 11.20%
Required
a. Calculate and compare Koch Company's ratios with the industry averages.
b. Discuss factors you would consider in deciding whether to invest in thecompany.

Earnings (net income) Preferred stock (19,800 shares at$50 par, 496) Common stock (45,000 shares at S1 par, market value $56) Paid-in capital in excess of par value Common Retained earnings S 289,000 S 990,000 45,000 720,000 843,750 2,598,750 Less: Treasury stock Preferred (1,800 shares) Common (1,800 shares) Total stockholders' equity S81,000 36,000 117,000 $2,481,750

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a Earnings per share 289000 72000 502 per share 43200 Preferred Dividends in Arrears 36000 Pr... View full answer

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