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Determine the price to earnings ratio

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Reference no: EM132968988

Question - ABC Company had addition to retained earnings for the current fiscal year just ended of $395,000. The firm paid out $195,000 in cash dividend, and it has ending total equity of $5.3 million. The company currently has 170,000 shares of common stock outstanding. Please answer the following questions:

Required -

1. Determine the price to earnings ratio (P/E)?

2. Determine the company had sales of $5.15 million, what is the price to sales ratio (P/S)?

3. Finally, explain the implication of P/E ratio for different types of investors.Provide references for content?

Reference no: EM132968988

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