In 2009 j.m. smucker paid a regular quarterly dividend of $0.35 a share. A. Matc

Question

In 2009 j.m. smucker paid a regular quarterly dividend of $0.35 a share. A. Match each of the following dates: A1. 17 july 2009 b1 record date A2. 11 august 2009 b2 payment date A3 12 august 2009 b3 ex-dividend date A4 14 august 2009 b4 last with-dividend date A5 1 September 2009 b5 declaration date b. on one of these dates the stock price is likely to fall by about the value of the dividend. Which date? Why? c. Smuckers stock price in August 2009 was $52. What was the dividend yield? d. If earnings per share for 2009 are $4.56, what is the percentage payout rate? e. Suppose that in 2009 the company paid a 10% stock dividend. What would be the expected fall in price?

R

Explanation / Answer

J.M smucker paid a regular quarterly dividend of $0.35
Annual Dividend per share = [$0.35 * 4]
Annual Dividend per share = $1.40

A1: 17 July 2009                     Record Date
A2: 11 August 2009                 Payment Date
A3: 12 August 2009                Ex-dividend date
A4: 14 August 2009                 Last with-dividend date
A5: 1 September 2009             Declaration Date

(b) 14th August 2009 Last with-dividend date

(c) Smuckers Stock price in August 2009 was $52

Dividend Yield = [Annual dividend Payment /
Current Share Price]
Dividend Yield = [$1.40 / $52]
Dividend Yield = 0.0269 (or) 2.69%

Dividend Yield = 2.69%

(d) If earnings per share for 2009 are $4.56, what is the percentage payout rate?

Earnings per share for 2009 = $4.56

Percentage Payout Rate = [Yearly Dividend per share /
Earnings per Share]
Percentage Payout Rate = [$1.40 / $4.56]
Percentage Payout Rate = 0.3070 (or) 30.70%

Percentage Payout Rate = 30.70%


(e) Suppose that in 2009 the company paid a 10% stock dividend. What would be the expected fall in price?

Earnings per share for 2009 = $4.56
Stock dividend = 10%
Earnings per share for 2009 after stock dividend = [$4.56 – ($4.56*
10%)]   
Earnings per share for 2009 after stock dividend = [$4.56 – $0.456]
Earnings per share for 2009 after stock dividend = $4.104

P/E Ratio = [Price per share / Annual Earnings per Share]
P/E Ratio = [$52 / $4.104]
P/E Ratio = 12.67

The P/E ratio of a stock is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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