5 answers
The formula to calculate earnings per share (EPS) is:
\[ \text{EPS} = \frac{(\text{Net Income} - \text{Dividends on Preferred Stock})}{\text{Average Outstanding Shares}} \]
So, filling in the blanks:
(Net Income - Dividends on Preferred Stock) divided by Average Outstanding Shares = Earnings Per Share.
The formula to calculate the price/earnings (P/E) ratio is:
\[ \text{P/E Ratio} = \frac{\text{Market Price Per Share}}{\text{Earnings Per Share}} \]
So, filling in the blanks:
Market Price Per Share divided by Earnings Per Share = Price/Earnings Ratio.
The formula for calculating the Rate of Return on Common Stockholders' Equity (ROE) is:
\[ \text{ROE} = \frac{(\text{Net Income} - \text{Preferred Dividends})}{\text{Average Common Stockholders' Equity}} \]
So, filling in the blanks:
(Net Income - Preferred Dividends) divided by Average Common Stockholders' Equity = Rate of Return on Common Stockholders' Equity.
