e-Bay Inc. provides the following information for the year 2015: $$\begin{array} { | l | r | }
\hline \text { Net income } & \$ 250,000 \
\hline \text { Market price per share of common stock } & \$ 50 \text { per share } \
\hline \text { Dividends paid } & \$ 180,000 \
\hline \text { Common stock outstanding at Jan. } 1,2015 & 150,000 \text { shares } \
\hline \text { Common stock outstanding at Dec. } 31,2015 & 200,000 \text { shares } \
\hline
\end{array}$$ The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.

Question

e-Bay Inc. provides the following information for the year 2015: $$\begin{array} { | l | r | } 
\hline \text { Net income } & \$ 250,000 \
\hline \text { Market price per share of common stock } & \$ 50 \text { per share } \
\hline \text { Dividends paid } & \$ 180,000 \
\hline \text { Common stock outstanding at Jan. } 1,2015 & 150,000 \text { shares } \
\hline \text { Common stock outstanding at Dec. } 31,2015 & 200,000 \text { shares } \
\hline
\end{array}$$ The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.

Quizplus · Accepted Answer

The Answer of e-Bay Inc. provides the following information for the year 2015: $$\begin{array} { | l | r | } 
\hline \text { Net income } & \$ 250,000 \
\hline \text { Market price per share of common stock } & \$ 50 \text { per share } \
\hline \text { Dividends paid } & \$ 180,000 \
\hline \text { Common stock outstanding at Jan. } 1,2015 & 150,000 \text { shares } \
\hline \text { Common stock outstanding at Dec. } 31,2015 & 200,000 \text { shares } \
\hline
\end{array}$$ The company has no preferred stock outstanding. Calculate the price/earnings ratio of common stock.

E-Bay Inc Provides the Following Information for the Year 2015