During 2018, Baird Corporation reported after-tax net income of $3,620,000. Duri

Question

During 2018, Baird Corporation reported after-tax net income of $3,620,000. During the year, the number of shares of stock outstanding remained constant at 9,920 of $100 par, 9 percent preferred stock and 396,000 shares of common stock. The company’s total stockholders’ equity is $19,600,000 at December 31, 2018. Baird Corporation’s common stock was selling at $52 per share at the end of its fiscal year. All dividends for the year have been paid, including $4.90 per share to common stockholders. Required Compute the earnings per share. (Round your answer to 2 decimal places.) Compute the book value per share of common stock. (Round your answer to 2 decimal places.) Compute the price-earnings ratio. (Round intermediate calculations and final answer to 2 decimal places.) Compute the dividend yield. (Round your answer to 2 decimal places. (i.e., .2345 should be entered as 23.45).)

Explanation / Answer

Net Income after ttax         $ 3620,000 Less: preferred Dividend    $ 89,280 (9920 shares @9) Net Income available for Common shareholders   $ 3530,720 Number of Common shares   396,000 shares Earning per share = Net income available to common shareholders/ Number of cmmon shares ( 3530720 /396000) = $ 8.92 per share Total Stockholders Equity:     $ 19,600,000 Less: Preferred Stockholders $ 992,000 (9920 shares @100) Common Stockholder Equity $ 18,608,000 Number of Common Share   396,000 shares Book value per share = Common Stockholders Equity/ Number of common shares ( 18608,000/396000 ) = $ 46.99 per share Market price per share   $52 per share Price earning ratio = Market price pe share / Earning per share (52/ 8.92 )= 5.83 Dividend per share   $ 4.90 per share Dividend yield ratio = Dividend per share/ Market price per share *100 (4.90/52*100) = 9.42 %

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