Question

Saved work 0 Makers Corp. had additions to retained earnings for the year just ended of $298,000. The firm paid out $178,000 in cash dividends, and it has ending total equity of $4.83 million. The company currently has 140,000 shares of common stock outstanding. a. What are earnings per share? (Do not round intermediate calculations and round b. What are dividends per share? (Do not round intermediate calculations and round c. What is the book value per share? (Do not round intermediate calculations and d. If the stock currently sells for $70 per share, what is the market-to-book ratio? (Do e. What is the price-earnings ratio? (Do not round intermediate calculations and round f. If the company had sales of $4.27 million, what is the price-sales ratio? (Do not round your answer to 2 decimal places, e.g, 32.16. your answer to 2 decimal places, e.g., 32.16.) round your answer to 2 decimal places, e.g., 32.16.) not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) your answer to 2 decimal places, e.g., 32.16.) intermediate calculations and round you r answer to 2 decimal places, e.g., 32.16.) a. Earnings per share b. Dividends per share c. Book value per share d. Market-to-book ratio e Price-earnings ratio t. Price-sales ratio times times times

Answer 1

Answer a:

Addition to retained earnings = Retention = $298,000

Cash dividends paid = $178,000

Earnings available to Common shareholders = 298000 + 178000 =$476,000

Earnings per share = Earnings available to Common shareholders / Common Stock outstanding = 476000 / 140000 = $3.40

Earnings per share = $3.40

Answer b:

Dividends per share = Dividends paid / common stock outstanding = 178000 / 140000 = $1.27

Dividends per share = $1.27

Answer c:

Book value per share = Total equity / common stock outstanding = 4830000 / 140000 = $34.50

Book value per share = $34.50

Answer d:

Market-to-book ratio = Market price per share / Book value per share = 70 / 34.50 = 2.03

Market-to-book ratio = 2.03

Answer e:

Price Earnings ratio = Market price per share / Earning per share = 70 / 3.40 = 20.59

Price Earnings ratio = 20.59

Answer f:

Price-sales ratio = Market price per share / Sales per share = 70 / (4270000 / 140000) = 2.30

Price-sales ratio = 2.30

$3.40 $1.27 $34.50 a. Earnings per share b. Dividends per share c. Book value per share d. Market-to-book ratio e. Price Earning ratio f. Price-sales ratio 2.03 times 20.59 times 2.30 times