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Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue
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Answer #1

(a)-Earnings per share

Earnings per share = [Net Income – Preferred dividends] / Average number of shares outstanding

= [$102,000 - $5,000] / [($16,000 + $24,000)/2]

= $97,000 / 20,000 shares

= 4.85 per share

(b)-Price-Earnings ratio

Price-Earnings ratio = Market price per share / EPS

= $20.37 per share / $4.85 per share

= 4.2 Times

(c)-Pay-out ratio

Pay-out ratio = [(Total dividends – Preferred dividends) / Net Income] x 100

= [($24,480 - $5,000) / $102,000] x 100

= [$19,480 / $102,000] x 100

= 19.1%

(d)-Times Interest Earned Ratio

Times Interest Earned Ratio = [Net Income + Interest Expenses + Income Taxes] / Interest Expenses

= [$102,000 + $10,000 + $28,500] / $10,000

= $140,500 / $10,000

= 14.1 Times

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