Question #244384
Determine the new share price, EPS and price earnings ratio under both alternatives ( ie. Pay the dividend or repurchase the shares)
Expert's answer
Earnings per share is calculated by taking the net income earned by the corporate and dividing it by the number of outstanding shares issued.
Price / Earnings ratio (P/E ratio) is measured by dividing the share price by the earnings per share. P/E and EPS are two of the most frequently used ratios.
