The income statement for Travers & Co. is shown below. The firm currently has 25
ID: 1172270 • Letter: T
Question
The income statement for Travers & Co. is shown below. The firm currently has 25.0 million shares of common stock outstanding. However, an analyst has looked at the firm's outstanding warrants and options to determine the likelihood of them being exercised. The analyst has determined that the firm's adjusted number of common shares after the expected dilution is 28.5 million. INCOME STATEMENT (Milions of dollars) 1,400 1,200 50 $ 150 Total revenues -Operating costs excluding depreciation - Depreciation and amortization expense Operating income (EBIT) - Interest expense Taxable income - Taxes Net income - Preferred dividends Net income available to common shareholders $125 48 Common dividends Addition to retained earnings $61 $16 Answer the following questions about Travers & Co.'s income statement What is the firm's DPS for 2005? O $1.79 O $2.44 O $2.25 O $3.13 O $2.83 What is the basic EPS? O $3.83 O $4.68 O $3.08 O $3.65 O $3.20 What is the diluted EPS? O $2.83 O $4.09 O $4.25 O $2.91 O $2.70 What is the firm's operating margin? 10.71% 0 13.79% ? 7.72% 16.67% 11.74% What is the firm's net profit margin? ? 8.51% ? 10.71% ? 15.53% 13.79% 5.50% oExplanation / Answer
Firm’s Dividend Per Share [DPS] for 2015
Dividend Per Share [DPS] = Common Dividend / Number of Common shares outstanding
= $61 Million / 25 Million Shares
= $2.44
Basic Earnings Per Share [EPS]
Basic EPS = Net Income Available to common shareholders / Number of Common shares outstanding
= $77 Million / 25 Million Shares
= $3.08
Diluted Earnings Per Share [ Diluted EPS]
Diluted EPS = Net Income Available to common shareholders / Adjusted number of Common shares outstanding after the expected dilution
= $77 Million / 28.5 Million shares
= $2.70
Firm’s Operating Margin
Operating Margin = [ Operating Income / Total Revenue ] x 100
= [ $150 Million / $1,400 Million ] x 100
= 10.71%
Firm’s Net Profit Margin
Net Profit Margin = [ Net Income / Total Revenue ] x 100
= [ $77 Million / 1,400 Million ] x 100
= 5.50%
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.