Pad 12:28 PM * 98% v2.cengagenow.com Cengage CengageNOWu2.. Horizontal Analysis.
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Pad 12:28 PM * 98% v2.cengagenow.com Cengage CengageNOWu2.. Horizontal Analysis... Income Statement The Following Infor... HWK CH 14 Earnings 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, $15 par value (no change during the year) Preferred $5 stock, $100 par (no change during the year) The net income was $576,000 and the declared dividends on the common stock were $42,500 for the current year. The market price of the common stock is $21.00 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 c. Dividends per Share d. Dividend Yield $2,550,000 2,000,000 Check My Work 2 more Check My Work uses remaining Previous ssignment Score: 0.0% All work saved Save and Exit Submit Assignment for GradingExplanation / Answer
a) Earning per share = (Earning available for common stockholders/No. of common stockholders)
No. of common stockholders = $2,550,000/$15 = 170,000
Earning available for common stockholders = Net income - Preferred dividends
Preferred dividends = (2,000,000*$5/$100) = $100,000
Earning available for common stockholders = $576,000 - $100,000 = $476,000
Earning per share = $476,000/170,000 = $2.80 per share
b) Price earnings ratio = Market price per share/Earning per share = $21.00/$2.80 = 7.5 times
c) Common stock dividends per share = $42,500/170,000 = $0.25 per share
d) Dividend yield = (Dividend per share/Market price per share)*100
= ($0.25/$21.00)*100 = 1.19%
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