Use the information on Newell Rubbermaid shown here to answer the questions belo

Question

Use the information on Newell Rubbermaid shown here to answer the questions below. SHOW WORK.

Current stock price                                $35.40                                                             

Beta                                                              1.40

Dividend per Share (annual)                   $0.68

Earnings per Share (annual)                   $1.58

Total Shares Outstanding             270 million

Assets                                             $6.35 billion

Liabilities                                        $4.32 billion

a.    Find the dividend yield. Express as a percentage rounded to the tenths.

b.    Find the payout ratio rounded to the nearest whole percent.

c.    Find the book value of the company. Newell Rubbermaid does not have preferred shares.

d.    Find the market capitalization of the company. Also, state whether this is a small-cap, mid-cap, or large-cap stock, and explain how you know.

Explanation / Answer

a) Dividend yield = cash dividend per share / market value per share = $ 0.68/ $ 35.40 = 1.20%

b) payout ratio = Dividend per share / Earning per share = 0.68/1.58 = 43.04%

c) book value of the company = total assets - intangible assets - total liability - equity with prior claims

= $ 6.35 million - 0 - 4.32 million = 2.03 million

D ) market capitalization = outstanding shares * share value market cap = 270 million * $35.40 =$ 9558 million.

It is under the category of small cap as its market cap is between $ 500 million to $ 2 billion . They are usually new companies that are not followed as much or not as widely recognized as large companies

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