The financial statements for Castile Products, Inc., are given below: Account ba
ID: 2491699 • Letter: T
Question
The financial statements for Castile Products, Inc., are given below:
Account balances at the beginning of the year were: accounts receivable, $240,000; and inventory, $300,000. All sales were on account.
Assume that Castile Products, Inc., paid dividends of $4.05 per share during the year. Also assume that the company’s common stock had a market price of $56 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 final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)
Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)
Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
Book value per share. (Round your answer to 2 decimal places.)
The financial statements for Castile Products, Inc., are given below:
Explanation / Answer
Answer:
(1) Earning per share = Earning available to share holders/no. of shares outstanding
Earnings = $ 271,740
No. of shares outstanding = common stock value/$ 5 par value of one share = 190,000/5 = 38000 shares
EPS = $ 271,740/38,000 = 7.15 per share
(2) Dividend payout share = DIvidend paid per share/Earning per share x 100
Dividend per share = 4.05 per share
Earning per share = 7.15 per share
= 4.05/7.15 x 100
= 56.64%
(3) Dividend yield ratio = dividend paid per share/current market price per share x100
= 4.05/56 x 100
= 7.23%
(4) price earning ratio = Market price per share/earning per share
= $ 56/ 7.15
= 7.83 times
(5) Book value per share = Total networth/no. of shares outstanding
Total networth = total assets - total liablities = 14,05,000 - 640,000 = 765,000
No. of shares outstanding = 5000
Book value per share = 765,000/5000 = 153 per share
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