natalieinverno
New member
- Joined
- May 8, 2018
- Messages
- 2
I have a question that I have calculated out but the answer doesn't match my textbook.
Some basic information I have already calculated.
Alpha Oil-
Share Price - $5.00
Number of shares held - 500
Increase of 10% in one year = 0.50c
PER- 10
Omega Oil-
Share Price - $10.00
Number of shares held- 250
Increase of 8% in one year = 0.80c
PER- 10
The question asks: If in the next 12 months, the share price of:
*Alpha Oil increases by 10% (already calculated above) while the PER remains at 10
*Omega Oil increases by 8% (already calculated above) while the PER reduces to 8
What is the gain?
I calculated:
*Alpha Oil - PER=Stock Price Per Share/Earnings per share... 10=5.00/0.50
*Omega Oil - 8=10.00/0.80
I arrived at a $250 gain for Alpha and a $200 gain for Omega = $450 but the textbook says 612.50
I think I am going wrong with the PER being to the left of the = in the equation and not knowing what to do with it.
Any help would be appreciated.
Thank you
Some basic information I have already calculated.
Alpha Oil-
Share Price - $5.00
Number of shares held - 500
Increase of 10% in one year = 0.50c
PER- 10
Omega Oil-
Share Price - $10.00
Number of shares held- 250
Increase of 8% in one year = 0.80c
PER- 10
The question asks: If in the next 12 months, the share price of:
*Alpha Oil increases by 10% (already calculated above) while the PER remains at 10
*Omega Oil increases by 8% (already calculated above) while the PER reduces to 8
What is the gain?
I calculated:
*Alpha Oil - PER=Stock Price Per Share/Earnings per share... 10=5.00/0.50
*Omega Oil - 8=10.00/0.80
I arrived at a $250 gain for Alpha and a $200 gain for Omega = $450 but the textbook says 612.50
I think I am going wrong with the PER being to the left of the = in the equation and not knowing what to do with it.
Any help would be appreciated.
Thank you