Question

The Amherst Company has อ net profits o $5 million sales o $114 million, อnd 1 8 million shares o common stock outstanding The company has total assets ofs53 million and total stockholders' equity o $31 million. It pays S 1.18 per share in common dividends, and the stock trades at $27 per share Given this information, determine the following a. Amherst's FPS b. Amhersts book value per share and price-to-book-value ratio C. The firm's PIE ratio d. The company's rnet profit margin. e. The stock's dividend payout ratio and its dividend yield. f. The stock's PEG ratio, given that the company's earnings have been growing at an average annual rate of 64% a. Amherst's EPSis (Round to the nearest cent) b. Amnersrs book value per shares.มิ (Round tothe nearest cent) Amberst's price-to-book-value ratio is(Round to two decimal places.) c. The firm's P/E ratio is」(Round to one decimal place.) d. The company's net profit margin is % (Round to two decimal places) , e. The stock's dividend payout ratio is□% (Round to two decimal places) The stock's dividend yield is D%, (Rourdto two doamal places.) f. The stock's PEG ratio, given that the company's earnings have been growing at an average annual rate of 6 4%, is | (Round to two decimal places) .

Answer 1

Answer a

EPS = Net income / Shares Outstanding

= 5 million / 1.8 million

= $2.78

Answer b

Book Value per share = Book Value of stockholder's Equity / Shares Outstanding

= 31 million / 1.8 million

= $17.22

P/B ratio = Stock Price / Book Value per share

= 27/17.22

= $1.57

Answer c

P/E ratio = Market price per share / EPS

= 27/2.78

= 9.7 times

Answer d

Net profit margin = Net profit/Sales

= 5 million / 114 million

= 4.39%

Answer e

Dividend Payout Ratio = Total Dividend Paid/Net income

= (1.18*1.8 million)/5 million

= 42.48%

Dividend Yield = Dividend per share / Market price per share

= 1.18/27

= 4.37%

Answer f

PEG ratio = P/E ratio / earnings growth rate

= 9.7/6.4

= 1.52