**in a hurry* Eanings per Share, Price-Earnings Ratio, Dividend Yield The follow

Question

**in a hurry*

Eanings per Share, Price-Earnings Ratio, Dividend Yield The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $35 par value (no change during the year) Preferred $10 stock, $200 par (no change during the year) The net income was $1,210,000 and the declared dividends on the common stock were $67,500 for the current year. The market price of the common stock is $24.00 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places. a. Earnings per Share b. Price-Earnings Ratio G Dividends per Share d. Dividend Yield $9,450,000 8,000,000

Explanation / Answer

SOLUTION

(A) Earnings per share = (Net income - preferred dividends) / Avg. number of common shares outstanding

= ($1,210,000 - $400,000) / 270,000

= $3

Preferred dividend = $8,000,000 / $200 * $10 = $400,000

Avg. number of common shares outstanding = $9,450,000 / $35 = 270,000

(B) P/E ratio = Market price per common share / EPS

= $24 / $3 = 8

(C) Dividends per share = Dividends / No. of shares

= $67,500 / 270,000 = $0.25

(D) Dividend yield = Dividend per share/Market price per share

= $0.25 / $24 = 1.04%

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.