Business, 17.07.2021 03:50 dmoney34

For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectations for future growth

Answers: 3

Show answers

Answers

Answer from: jackson5637

1. We have:

Return on common stockholders' equity for the current year = 12.85%

Return on common stockholders' equity 1 year ago = 13.17%

2. We have:

Price Earnings Ratio for the current year = 12.72

Price Earnings Ratio 1 year ago = 14.53

2a. Simon has higher market expectations for future growth.

3. We have:

Dividend Yield for the current year = 1.10%

Dividend Yield 1 year ago = 0.59%

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.

The explanation of the answers is now provided as follows:

1. Compute return on common stockholders' equity for the current year and 1 year ago.

Note: See part 1 of the attached excel file for the computation of the return on common stockholders' equity for the current year and 1 year ago with the formulae.

To calculate Return on Common Stockholders’ Equity in the attached excel file, the following formula is used:

Return on Common Stockholders Equity = Net Income / (Average Common Stock + Retained Earnings)

From the attached excel file, we have:

Return on common stockholders' equity for the current year = 12.85%

Return on common stockholders' equity 1 year ago = 13.17%

2. Compute price-earnings ratio on December 31 for the current year and 1 year ago.

Note: See part 2 of the attached excel file for the computation of the price-earnings ratio on December 31 for the current year and 1 year ago with the formulae.

To calculate price-earnings ratio in the attached excel file, the following formula is used:

Price Earnings Ratio = Market Price / Earnings per share

From the attached excel file, we have:

Price Earnings Ratio for the current year = 12.72

Price Earnings Ratio 1 year ago = 14.53

2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectations for future growth.

When the PE ratio is higher, it is an indication that investors are willing to pay a greater share price in the future because of expected growth.

Since Simon's PE ratios for the current year of 12.72 is greater than the competitor's 8, it indicates that Simon has higher market expectations for future growth.

3. Compute dividend yield for the current year and 1 year ago.

Note: See part 3 of the attached excel file for the computation of dividend yield for the current year and 1 year ago with the formulae.

To calculate Dividend Yield in the attached excel file, the following formula is used:

Dividend Yield = Dividend per share / Market Price per share

From the attached excel file, we have:

Dividend Yield for the current year = 1.10%

Dividend Yield 1 year ago = 0.59%

Answer from: Quest

first one

explanation:

Answer from: Quest

It would be contaminated with germs

Another question on Business

Business, 21.06.2019 23:30

Highland company produces a lightweight backpack that is popular with college students. standard variable costs relating to a single backpack are given below

Answers: 1

Answer

Business, 22.06.2019 15:30

Uknow what i love about i ask a dumb question it is immediately answered but when i ask a real question it take like an hour to get answered

Answers: 2

Answer

Business, 22.06.2019 18:30

Amanufacturer has paid an engineering firm $200,000 to design a new plant, and it will cost another $2 million to build the plant. in the meantime, however, the manufacturer has learned of a foreign company that offers to build an equivalent plant for $2,100,000. what should the manufacturer do?

Answers: 1

Answer

Business, 22.06.2019 21:20

What business practice contributed most to andrew carnegie’s ability to form a monopoly?

Answers: 1

Answer

You know the right answer?

For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockhol...

Questions