Refer to the Data for Knife Corp

question 134

Essay

Refer to the data for Knife Corp.
EQUIRED:
A Calculate earnings per share for 2016 for Knife. Why is this considered one of the most quoted ratios for public companies? Which investors, common or preferred or both, desire this information?
B Calculate the price/earnings ratio for 2016 for Knife. Why is this ratio important to investors? Explain.

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Definitions:

Inflation

It is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Probability Range

A statistical measure that quantifies the likelihood of various outcomes for an event, often expressed as a minimum and maximum value.

Returns

The profit or loss derived from an investment over a specific period, expressed as a percentage of the investment's initial cost.

Probability

A measure or estimation of how likely an event is to occur, often expressed as a fraction or percentage.