The financial statements for Castile Products, Inc., are given below: Account ba
ID: 2482673 • Letter: T
Question
The financial statements for Castile Products, Inc., are given below:
Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.
Assume that Castile Products, Inc., paid dividends of $2.10 per share during the year. Also assume that the company’s common stock had a market price of $42 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.
Earnings per share. (Round your answer to 2 decimal places.)
Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to nearest whole number.)
Price-earnings ratio. (Round your intermediate calculations to 2 decimal places. Round your answer to nearest whole number.)
Book value per share. (Round your answer to 2 decimal places.)
The financial statements for Castile Products, Inc., are given below:
Explanation / Answer
EPS = net income / Number of outstanding shares of common stock
= 21000 / 6000 = 3.5
Dividend payout ratio = Total dividends / net income
= 6000 Shares * 2.10 / 21000
= 12600 / 21000 = 0.6 or 60%
Dividend yield ratio = DPS / MPS
= 2.10 / 42 = 0.05 or 5%
Price earnings ratio = MPS / EPS
= 42 / 3.5 = 12
Book value per share = Total common stock holders equity / number of common shares
= 170000 / 6000 = 28.33.
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