GCU.FIN504.L2 - a Calculate Philagems 2012 earnings per...

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a. Calculate Philagem’s 2012 earnings per share (EPS).
b. If the firm paid common stock dividends of $0.80 per share, how many dollars would go to retained earnings?
a. What problems might Robert encounter in comparing these companies to one another on the basis of their ratios?
c. Why might it be all right for the electric utility to carry a large amount of debt, but not the software company?
d. Why wouldn’t investors invest all of their money in software companies instead of in less profitable companies? (Focus on risk and return.)
ely. nies?

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