Question

Consider the following information. Stock price $55/share Avg. common shares outstanding 850,000 Common dividends $765,000 Dividends...

Consider the following information.

Stock price $55/share Avg. common shares outstanding 850,000
Common dividends $765,000 Dividends per common share $0.90/share
Preferred dividends $238,800 Net income $15,485,000
2019 preferred stock $6,162,000 2018 preferred stock $5,299,000
2019 total stockholders’ equity $28,435,000 2018 total stockholders’ equity $25,483,000
Purchases of treasury stock $120,000

Required:

1. Calculate the stockholder payout ratios. (Note: Round answers to three decimal places.)

Dividend Yield %
Dividend Payout %
Total Payout %
Stock Repurchase Payout %

2. Calculate the stockholder profitability ratios. (Note: Round answers as follows: Return on Common Equity to three decimal places; Earnings per Share to two decimal places.)

2019 Return on Common Equity %
Earnings per Share $ per share
0 0
Add a comment Improve this question Transcribed image text
Answer #1

1)

Formula
Dividend yield Dividend per share /market price per share

.90/55

1.636%

Dividend payout ratio Total common stock Dividend /Earning available to common stockholders

765000/15246200

5.018%

Total payout ratio Total dividend paid to both stockholders /Net income

(765000+238800)/15485000

1003800/15485000

6.482%

Stock repurchase payout Purchase of treasury stock/market capitalization of common stock

120000/(850000*55)

120000/46750000

.257%

**

Earning available to common stockholders = Net income -preferred dividend

                               = 15485000 - 238800

                               = 15246200

b)Common stockholders equity :

Beginning = Total -preferred

              = 25483000-5299000

              = 20184000

Ending= 28435000-6162000

            =22273000

Average common stockholders equity= [20184000 +22273000]/2

                             = 42457000/2

                                = 21228500

Formula
Return on common equity Earning available to common stockholders /Average common stockholders equity

15246200/21228500

71.819%

Earning per share Earning available to common stockholders/average common shares outstanding

15246200/850000

=$ 17.94 per share

Add a comment
Know the answer?
Add Answer to:
Consider the following information. Stock price $55/share Avg. common shares outstanding 850,000 Common dividends $765,000 Dividends...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Calculator Print Item Exercise 12-79 Debt Management Ratios Financial statements for Steele Inc. follow. Steele Inc....

    Calculator Print Item Exercise 12-79 Debt Management Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 $6,944,296 (4,953,556) $1,990,740 (1,202,042) $6,149,218 (4,355,675) $1,793,543 (1,080,843) Net sales Cost of goods sold Gross margin General and administrative expenses Special and nonrecurring items Operating income Interest expense Other income Gain on sale of investments Income before income taxes Provision for income taxes Net income $7,245,088 (5,286,253) $1,958,835 (1,259,896) 2,617 $701,556 (63,685)...

  • The following information pertains to Parsons Co.: Preferred stock, cumulative:     Par value per share $100     Dividend...

    The following information pertains to Parsons Co.: Preferred stock, cumulative:     Par value per share $100     Dividend rate 8%     Shares outstanding 11,000     Dividends in arrears none Common stock:     Par value per share $10     Shares issued 125,000     Dividends paid per share $2.10     Market price per share $47.00 Additional paid-in capital $490,000 Unappropriated retained earnings (after closing) $250,000 Retained earnings appropriated for contingencies $300,000 Common treasury stock:     Number of shares 11,000     Total cost $250,000 Net income $633,000 Compute (assume no changes in balances...

  • A primary driver of an increase in stock price is profitability. Which of the following ratios...

    A primary driver of an increase in stock price is profitability. Which of the following ratios is used to evaluate stockholder profitability? a. Dividend yield b. Total payout ratio c. Dividend payout ratio d. Earnings per share ABC Corporation had $125,000 of net income for the year. Assume the company, which has no preferred stock, paid a $10 per share dividend at the time the stock was selling for $50 per share and there were 25,000 shares of $1 par...

  • York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value

    York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends. 2016 total cash dividends $ 20,000 2018 total cash dividends $ 200,000 2017 total cash dividends 28,000 2019 total cash dividends 350,000 Exercise 11-8 Dividends on common and noncumulative preferred stock LO C2 Determine...

  • i Data Table Years Ended December 31, 2019 and 2018 Dollars in thousands 2019 2018 2017...

    i Data Table Years Ended December 31, 2019 and 2018 Dollars in thousands 2019 2018 2017 Net Sales Revenue Cost of Goods Sold Selling and Administrative Expenses Interest Expense $ 184,000 $ 152,000 98,500 83,000 47,000 43,000 8,500 10,000 13,000 9,500 $ 17,000 $ 6,500 Income Tax Expense Net Income Additional data: Total Assets Common Stockholders' Equity Preferred Dividends Common Shares Outstanding During the Year $ 210,000 $ 190,000 $ 174,000 92,500 82,500 77,000 3,000 3,0000 20,000 20,000 10,000 Print...

  • Profitability Analysis Albion Inc. provided the following information for its most recent year of operations. The...

    Profitability Analysis Albion Inc. provided the following information for its most recent year of operations. The tax rate is 40%. Sales $100,000 Cost of goods sold 45,000 Net income 10,500 Interest expense 350 Assets—beginning balance 120,000 Assets—ending balance 126,000 Preferred dividends $300 Common dividends (paid December 31) $8,000 Common shares outstanding—January 1 30,000 shares Common shares outstanding—December 31 40,000 shares Average common stockholders' equity $55,000 Market price per common share $12 Required: Round all answers to two decimal places except...

  • Exercise 14-16 This financial information is available for Crane Corporation. 2020 Average common stockholders' equity Dividends...

    Exercise 14-16 This financial information is available for Crane Corporation. 2020 Average common stockholders' equity Dividends paid to common stockholders Dividends paid to preferred stockholders Net income Market price of common stock $1,780,000 90,500 19,500 294,500 2019 $1,900,000 68,000 19,500 240,500 23 The weighted average number of shares of common stock outstanding was 175,500 for 2019 and 146,500 for 2020. Calculate earnings per share and return on common stockholders' equity for 2020 and 2019. (Round answers to 2 decimal places,...

  • This financial Information is available for Sunland Corporation. Average common stockholders' equity Dividends paid to common...

    This financial Information is available for Sunland Corporation. Average common stockholders' equity Dividends paid to common stockholders Dividends paid to preferred stockholders Net Income Market price of common stock 2020 $1,755,000 84,000 22,000 286,500 21 2019 $2,100,000 72,000 22,000 243,000 The weighted average number of shares of common stock outstanding was 176,500 for 2019 and 147,500 for 2020. Calculate earnings per share and return on common stockholders' equity for 2020 and 2019. (Round answers to 2 decimal places, e.g. 10.50%...

  • York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par...

    York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.    2016 total cash dividends $ 20,000 2018 total cash dividends $ 200,000 2017 total cash dividends 28,000 2019 total cash dividends 350,000 Determine the amount of dividends paid each year to each of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT