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Bonita Corporation had net income of $1550000 and paid dividends to common stockholders of $400000 in 2017. The weighted average number of shares outstanding in 2017 was 387500 shares. Bonita Corporation's common stock is selling for $48 per share on the NASDAQ. Bonita Corporation's price-earnings ratio is

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abiolataiwo2015

Answer:

16 times

Explanation:

Calculation to determine what Bonita Corporation's price-earnings ratio is

Price-earnings ratio= ($1550000 -$400000)/387500

Price-earnings ratio=$1,150,000/387500

Price-earnings ratio=2.97

Price-earnings ratio= 48/2.97

Price-earnings ratio=16 times

Therefore Bonita Corporation's price-earnings ratio is 16 times

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