Question

If XYZ common stock has a $4 dividend, a yield of 4.2%, a price-to-earnings (P/E) ratio of 12, and it is trading at $96, its approximate earnings per share (EPS) is

Answer 1

$8

Explanation:

According to the given situation, the computation of earnings per share is shown below:-

Earnings per share = Stock price ÷ Price-to-earnings

= $96 ÷ 12

= $8

Therefore we have applied the above formula to determining the earnings per share.

The same is to be considered

We simply divided the stock price by the price to earning so that the earning per share could come