Earnings per Share, Price-Earnings Ratio, Dividend Yield The following Informati

Question

Earnings per Share, Price-Earnings Ratio, Dividend Yield The following Information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $10 par value (no change during the year) Preferred $8 stock, $100 par (no change during the year) The net income was $520,000 and the declared dividends on the common stock were $37,500 for the current year. The market price of the common stock is $18.00 per share For the common stock, determine (a) the earnings per share, (b) the price-earnings ratlo, (c) the dividends per share, and (d) the dividend yleld. If requlred, round your answers to two $1,500,000 2,000,000 decimal places a. Earnings per Share b. Price-Earnings Ratio c. Dividends per Share d. Dividend Yield

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Net Income                 520,000.00 Dividend on preferred stock = 2000,000/100*8            (160,000.00) Earning available for common stock               360,000.00 No of shares of common stock= 1,500,000/10               150,000.00 Earning per share= 360,000/150,000                            2.40 b) Market price per share                         18.00 PE Ratio = 18/2.40                            7.50 c) Common stock dividends                 37,500.00 No of shares of common stock               150,000.00 Dividend per share= 37,500/150,000                            0.25 d) Dividend Yield = .25/18 1.39%

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