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Calculate the price-earnings ratio for each company

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Reference no: EM132763637

Question - Based on the following information for Company A and Company B:

 

Company A

Company B

Market price per share

$75.00

$95.00

Earnings per share

12.00

5.00

Dividends per share

3.00

.10

Investor's cost per share

40.00

50.00

Required -

(a) Calculate the price-earnings ratio for each company. Show all work.

(b) Assume that Company A and B are in the same industry. Which one is expected to have the greater growth and the more improved earnings? Why?

Reference no: EM132763637

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