Rossdale, Inc., had additions to retained earnings for the year just ended of $6
ID: 2816310 • Letter: R
Question
Rossdale, Inc., had additions to retained earnings for the year just ended of $638,000. The firm paid out $65,000 in cash dividends, and it has ending total equity of $7.33 million.
If the company currently has 700,000 shares of common stock outstanding, what are earnings per share? Dividends per share? What is book value per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
If the stock currently sells for $30.30 per share, what is the market-to-book ratio? The priceearnings ratio? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
If total sales were $10.63 million, what is the pricesales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Pricesales ratio
Explanation / Answer
retained earnings = net income - dividends
or, $6,38,000 = $703,000
EPS : NET INCOME/ NUMBER OF SHARES
= $703,000/ 700000
=1
EARNINGS PER SHARE IS EQUAL TO 1 PER SHARE.
DIVIDENDS PER SHARE
= DIVIDENDS / TOTAL NUMBER OF SHARES
=$65,000/700,000
= 0.09
BOOK VALUE PER SHARE : EQUITY / NUMBER OF SHARES
= $7330000/7,00,000
= 10.47
IF THE SHARES SELL AT $30.30 PER SHARE,
MARKET/BOOK VALUE = 30.3/10.47
=2.89 TIMES
PRICE EARNINGS RATIO
30.3/1.004
=30.18 TIMES
PRICE TO SALES:
SALES PER SHARE :$10630000/700000
=15.1857
THEREOFRE, 30.3/15.1857
=1.99 TIMES
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