Exercise 11-19A (Algo) Using the P/E ratio LO 11-9 Lake Incorporated and River...
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Accounting
Exercise A Algo Using the PE ratio LO
Lake Incorporated and River Incorporated reported net incomes of $ and $ respectively, for the most recent fiscal year. Both companies had shares of common stock issued and outstanding. The market price per share of Lakes stock was $ while Rivers sold for $ per share.
Required
Determine the PE ratio for each company.
Based on the PE ratios computed in Requirement a which company do investors believe has the greater potential for growth in income?
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