Ans- a)- Earnings per share= (Net profit-preference dividend)/ weighted number of shares outstanding
=($146,000-$4,000)/ ((16,000+24,000)/2)
=$142,000/20,000
=$7.1
b)- Price-earning ratio= Market price per share/ EPS
=$18.46/ $7.1
=2.6 times
c)- Payout ratio=Dividend paid/ net profit
Dividend =$27,740-$4,000= $23,740
=$23,740/ $146,000*100
=16.26%
d)-Times interest earned= Profit before interest and tax/ interest expense
Earnings before interest and taxes= $146,000+$10,000+23,000=$179,000
=$179,000/$10,000
=17.9 times
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Ch 14: Practice Question 5 Income Statement $ 146000 1. Common stock outstanding January 1, 2020,...
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