If the price-earnings ratio for XYZ is 20, then what is the price of a share of its stock?
In 2008, XYZ Corporation had total earnings of $200 million and 50 million shares of the corporation’s stock were outstanding. If the price-earnings ratio for XYZ is 20, then what is the price of a share of its stock? a)$5 b)$10 c)$80 d)$500
If the price-earnings ratio for XYZ is 20, then what is the price of a share of its stock?
In 2008, XYZ Corporation had total earnings of $200 million and 50 million shares of the corporation’s stock were outstanding. If the price-earnings ratio for XYZ is 20, then what is the price of a share of its stock? a)$5 b)$10 c)$80 d)$500
What does it mean when one says the stock is trading at xyz times FY18?
Typically it’s earnings, but it could be revenue as well. It’s a measure of how long it will take for a company to earn its valuation. Also implicit is the inherent growth or fall of a company. For example, at one time, Facebook was trading at something like 100x its yearly earnings. There’s no way that’s a fair evaluation, unless you expect it to grow 10x in earnings. If it then grew 10x in earnings, then it would only trade at 10x yearly earnings, and that’d be reasonable.Similarly, companies that trade at 2–3x their yearly earnings are expected to fall. Think of a gaming company or mining company — their user base or remaining mineable resources are limited and could easily exhaust that. So, the long term view is not going to be 10x or 14x or whatever the standard valuation is.Also, you used FY18 instead of FY16. I guess that means it’s a multiple of the projection as opposed actual or trending.Uncommon ratios that people use could be a multiple of revenue or book value as opposed to earnings. Revenue used for quickly growing companies or companies whose earnings are not representative of their financial futures. Book value is what the company is worth today if it were sold off piece by piece.
When they say a company is trading at 'x' times earnings, and they references the P/E or PEG, what is meant?
"x" times earnings is p/e "price to earnings" It is price of stock compared to the earnings per share of stock xyz comapny made 1000 dollars they have 1000 shares of stock on market so they "earned 1 dollar per share of stock they trade at 3 dollars per share of stock so they are trading at 3 times their earnings. or they have a "p/e" of 3 The price a stock trades at is ussually based on the expected future earnings. that is why it is traded for higher than what they currently earn
What is the difference between share price and dividend?
Share Price is nothing but what you pay for the business. Dividend is a part of a Business earnings.Suppose, you bought 100 Shares of ABC(Listed Company) in a stock market for the price of 50/- per share. Now, your investment is 100 X 50 = 5000 /- So that, you are paying Rs. 50 for every share like buying 1 kg tomatoes in a vegetable market. Price can vary as it depends on the buyer. Price is actually what you pay for the business of a company.If the Company ABC earns a profit for a particular financial year and willing to pay the profits to you, they can. Because it’s your money to made the profits for the company. So, they could pay the profits like a bank interest for the investment. The Company can pay the profits on different names like Dividend, Bonus issue. Dividends are based on the profits made and the company have a choice to pay it for the shareholders or may not.If ABC Company net profit is 10,00,000 /- and they are willing to distribute of Rs. 5,00,000 /- as dividends and the balance amount of Rs. 5,00,000 /- will be used for their production to grow. Total number of shares in ABC Company - 5,00,000 So that 5,00,000 will be divided by number of shares. So, that Re. 1 for each share is the dividend, what the company distributes. Your Investment amount is Rs. 5000 with holding of 100 Shares.You can get the dividend of Rs. 100 /- (Re.1 per share).You bought the shares at the price of Rs. 50 /-. Someone may get the shares below or above than what you paid. Now, you got Re.1 for the share of price Rs. 50/-Re. 1 Dividend / Rs. 50 share price = 0.02 X 100 = 2 %2 % is called as the Dividend yield.Dividend Yield is a share’s dividend as a percentage of the share price.