Use the following information to answer the problems
Raney Corporation had net income of $200,000 and paid dividends to common stockholders of $50,000 in 2008. Weighted average number of shares outstanding in 2008 was 50,000 shares. Raney Corporation's common stock is selling for $40 per share on New York Stock Exchange.
1. Raney Corporation's price-earnings ratio is:
a. 2.5 times.
b. 10 times.
c. 13.3 times.
d. 4 times.
2. Raney Corporation's payout ratio for 2008 is:
a. $4 per share.
3. Holt Company reported following on its income statement:
|Income before income taxes
|Income tax expense
Analysis of income statement revealed that interest expense was $52,500. Holt Company's time's interest earned was
a. 9 times.
b. 8 times.
c. 7 times.
d. 6 times.