Question

Griffins Goat Farm, Inc., has sales of $678,000, costs of $340,000, depreciation expense of $84,000, interest expense of $52,000, a tax rate of 21 percent, and paid out $41,000 in cash dividends. The firm has 29,400 shares of common stock outstanding.

a.	What are the earnings per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	What are the dividends per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

a.	Earning per share is		$ 5.43
	Working:
	Sales					$       6,78,000
	Cost of goods sold					-3,40,000
	Gross Profit					3,38,000
	Depreciation Expenses					-84,000
	Earning before interest and taxes					2,54,000
	Interest Expense					-52,000
	Profit before tax					2,02,000
	Tax Expense					-42,420
	Net Income				a	$       1,59,580
	Number of common shares outstanding				b	29,400
	Earning Per Share				c=a/b	$               5.43
b.	Dividend per share is		$ 1.39
	working:
	Dividend Paid				a	$           41,000
	Number of common shares outstanding				b	29,400
	Dividend Per share				c=a/b	$               1.39