Final Exam need ASAP Exercise 139 The following information pertains to Parsons

Question

Final Exam need ASAP

Exercise 139

The following information pertains to Parsons Co.:

Compute (assume no changes in balances during the past year): (Round per share and ratios to 2 decimal places, e.g. $15.75 or 15.75%.)

Preferred stock, cumulative:     Par value per share $100     Dividend rate 8%     Shares outstanding 11,000     Dividends in arrears none Common stock:     Par value per share $10     Shares issued 135,000     Dividends paid per share $2.00     Market price per share $49 Additional paid-in capital $480,000 Unappropriated retained earnings (after closing) $250,000 Retained earnings appropriated for contingencies $310,000 Common treasury stock:     Number of shares 11,000     Total cost $260,000 Net income $636,000

Explanation / Answer

Total amount of stockholders' equity in the balance sheet $2,130,000.00 Earnings per share of common stock $4.71 per share Book value per share of common stock $17.18 per share Payout ratio of common stock 42.45% Return on common stock equity 29.86% % Workings : Preferred stock, cumulative:     Par value per share $100     Dividend rate 8%     Shares outstanding 11,000 Preferrence share capital 1,100,000 (11000*100)     Dividends in arrears none Common stock:     Par value per share $10     Shares issued 135,000 H     Dividends paid per share $2.00     Market price per share $49 Common stock share capital $1,350,000 (135000*10) A Additional paid-in capital $480,000 B Unappropriated retained earnings (after closing) $250,000 C Retained earnings appropriated for contingencies $310,000 D Total $2,390,000 E= A+B+C+D LESS: treasury stock cost ($260,000) F Total amount of stockholders' equity $2,130,000 G= E-F Common treasury stock:     Number of shares 11,000     Total cost $260,000 Net income $636,000 I Earning per share $4.71 J=H/I Bookvalue per share 17.18 2130000/(135000-11000) Payout ratio of common stock 42.45% (2/4.71) Return on common stock equity 29.86% (636000/2130000)

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