the goal is to find and provide the earnings per share (EPS) and price-to earnings (P/E) for (1) one of the stocks in your portfolio as well as the EPS and P/E for a competitor of your selected stock. Yes, I know that Yahoo Finance provides the EPS and P/E ratio for stocks. However, I also would like for you to find and share the following information concerning your selected stock and its competitor.
The Net Profit After Taxes
Preferred Dividends
Number of Common Shares Outstanding
The Share Price of the Common Stock
The information listed above represents the data needed to calculate the EPS and P/E ratio of a stock. The formula for both ratios are given below and in your textbook on pages 283 – 284.
EPS = [(Net profit after taxes – Preferred dividends) / Number of common shares outstanding]
P/E Ratio = Price of common stock / EPS
Discussion Board Questions
After finding and providing 1.) The Net Profit After Taxes, 2.) Preferred Dividends, 3.) Number of Common Shares Outstanding, 4.) The Share Price of the Common Stock, 5.) EPS, and 6.) P/E Ratio for your selected stock and its competitor, complete the following.
Describe which company has the high P/E ratio and the one with the low P/E ratio.
Explain what the P/E ratio value mean for each company and factors that may contribute to the companies having a high or low P/E ratio.
Identify the company that presents itself as a better value based on the P/E ratio.
Share your thoughts on whether you agree or disagree with investing in the stock that presents itself as a better value.
Explain your rationale for the responses that you provide.
Please use in-text citations as well as provide a reference list of resources that help to support the points and reasoning that you give in your discussion posts.
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