Investment Measures

Question 1

earnings per share

Answer 1

net income earned for each outstanding share - (net income - preference dividends)/ weighted average number of ordinary shares outstanding)

Question 2

price-earnings ratio

Answer 2

how much an investor is willing to pay for each unit of earnings - market price per ordinary share/ earnings per share

Question 3

dividend yield on ordinary share

Answer 3

the percentage of a share’s market value returned annually to the shareholders as dividends - dividend per ordinary share/ market price per ordinary share

Question 4

book value per ordinary share

Answer 4

indicates the recorded accounting amount for each ordinary share outstanding - (total shareholders equity - preference equity)/ number of ordinary shares outstanding