Rossdale, Inc., had additions to retained earnings for the year just ended of $5

Question

Rossdale, Inc., had additions to retained earnings for the year just ended of $575,000. The firm paid out $140,000 in cash dividends, and it has ending total equity of $7.3 million. Requirement 1: If the company currently has 490,000 shares of common stock outstanding, what are earnings per share? Dividends per share? What is book value per share? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Earnings per share Dividends per share Book value per share 28 Requirement 2: If the stock currently sells for $47 per share, what is the market-to-book ratio? The price-earnings ratio? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations Round your answers to 2 decimal places (e.g., 32.16).) Market-to-book ratio times Price-earnings ratio times Requirement 3: If total sales were $15.4 milion, what is the price-sales ratio? (Do not round intermediate calculations Round your answer to 2 decimal places (e.g., 32.16).) Price-sales ratio times

Explanation / Answer

Answer :- a) earning per share

Formula used :

earning available for equity shareholders /No. of equity share holders

Earning available for equity shareholders = retained earning + cash dividend

Earning available for equity shareholders = 575000$+140000$ =715000 $

Earning per share =715000$/490000

Earning per share = 1.45

b) Dividend per share

Formula used = dividend paid / No. Of equity shareholders

= 140000$/490000

= 0.28

c)Book value per share

Formula used

= book value of equity /No. Of equity shareholders

= 7.3 $ million /490000

= 7300000 $/490000

Book value per share = 14.89

d) Market to book ratio

Formula used : market value per share /book value per share

= 47 $/14.89$

= 3.15 times

e) Price earning ratio

Formula used

=market price per share / Earning per share

= 47 $/1.45 $

= 32.41 times

f) price sales ratio

Formula used : market price of equity/ total sales

Market price of equity = 47$ * 490000 = 23,03,00,00 $ or 23.03 million

Total sales (given) = 15.4 $ million

Price sales ratio = 23.03 $ million / 15.4 $ million

= 1.49 times

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