I Linkedin × X Current Students l Xavier Univ × (41 zjattempt.php?attempt 152723

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I Linkedin × X Current Students l Xavier Univ × (41 zjattempt.php?attempt 15272368page-2 strassera@sa Waylens Horizon X Xavier University-S Menu Return on Common Stockholders Equity, Dividend Yield, and Dividend Payout The following information relates to Litchfield, Inc 2015 2016 150,000 $190,000 15,000 15,000 004200,000 3.40 3.60 5.80 5.90 58.00 59.50 Net income Preferred stock dividends rage common stockholders' equity Dividend per common share Earnings per share Market price per common share year-end a. Calculate the company's return on common stockholders' equity for 2015 and 2016. b. Calculate the company's dividend yield for 2015 and 2016 c. Calculate the company's dividend payout for 2015 and 2016. Round answers to one decimal point. 2015 2016 a. Return on Common Stockholder Equity b. Dividend Yield c. Dividend Payout 0% 0% 0% 0% 0% 0 % MacBook Ai

Explanation / Answer

note:

return on common stock holder equity = (net income - preferred dividend) / (average common stock holders equity)

for 2015:

($150,000 - 15,000) / 4,000,000 *100

=>3.4%................(rounded to one decimal place).

2016:

($190,000 - 15,000) / 4,200,000

=>4.2%.

b.company's dividend yield for 2015 and 2016.

dividend yield = dividend paid / market price per common share

for 2015:

$3.40 / 58.00

=>0.05862068965

=>5.9%.....(rounded to one decimal).

for 2016.

=>$3.60 / $59.50

=>0.06050420168

=>6.1%

c.dividend pay out ratio => dividend per share / earnings per share*100

2015:

=>$3.40 / $5.80*100

=>58.6%.

2016

=>3.60 / 5.90*100

=>61.0%

2015 2016 a.return on common stock holder equity 3.4% 4.2% b.dividend yield 5.9% 6.1% c.dividend payout 58.6% 61.0%

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