Question

Assume you found the following stock quote for DRK Enterprises, Inc., at your favorite Web site. You also found that the stock paid an annual dividend of $.89, which resulted in a dividend yield of 1.6 percent. Assume the company has 92 million shares of stock outstanding and a P/E ratio of 21.

Company Symbol Vol Close Chg %Chg %Chg
DRK Enterprises DRK 18,649,130 ?? .26 .45% 8.73%
What was net income for the most recent four quarters?

Answer 1

Answer:

$234,690,475.84

Explanation:

Dividend yiedl = Annual dividend / Stock price

1.6% = $0.89 / Stock price

Stock price = $0.89/0.016

Stock price = $55.625

P/E Ratio = Stock price / EPS

21 = $55.625 / EPS

EPS = $55.625 /21

EPS = $2.6488

Net income = EPS * No of shares outstanding

Net income = $2.6488 * 92,000,000

Net income = $234,690,475.84

Therefore, the net income for the most recent four quarters is $234,690,475.84