Question

* T Troy University- Two Supreme-Page ebook QO EC2013 Show Me How Calculator 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 currentl y Common stock, $20 par (no change during the year) $10,000,000 Preferred $4 stock, $40 par (no change during the year) 2.500,000 The net income was $1,750,000, and the declared dividends on the common stock were $1,125,000 for the current year. The market price of the common stock is $45 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividend per share, and the dividend y o u to decima except for dollar amounts which should be rounded to two decimal places a. Earnings per Share b. Price-Earnings Ratio c. Dividends per Share d. Dividend Yield < Previous Next > Check My Work Email instructor Save and Est All work saved. Submit Antigoment for Grading

Answer 1

A. EPS= Net income- Preference dividend declared/Outstanding common stock

EPS= 1750000-1125000/500000

= 625000/500000

=1.25

B. Price earnings ratio= Stock market price/EPS

=45/1.25

= 36

C. DPS= Dividends paid/outstanding shares

=1125000/500000

=2.25

D. Dividend Yield= DPS/Stock market price

= 2.25/45

=0.05 or 5%