The following information relates to three companies in the same industry                                   Latest                  Earnings            Dividends Company          market price                per share           per share A                       $ 35                             $11                    $0 B                        $40                              $5                     $4 C                       $ 90                             $10                   $6 Required: Explain and calculate the price -earnings and dividend yield ratios. On the basis of only the foregoing information, which company represents the most attractive investment opportunity to you? Explain.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
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The following information relates to three companies in the same industry

                                  Latest                  Earnings            Dividends

Company          market price                per share           per share

A                       $ 35                             $11                    $0

B                        $40                              $5                     $4

C                       $ 90                             $10                   $6

Required: Explain and calculate the price -earnings and dividend yield ratios. On the basis of only the foregoing information, which company represents the most attractive investment opportunity to you? Explain.

 

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