Comparative financial statements for Weller Corporation, a merchandising company

Question

Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 870,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.40. The market value of the company’s common stock at the end of the year was $21.50. All of the company’s sales are on account.

Earnings per share. (Round your answer to 2 decimal places.)

Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

Book value per share. (Round your answer to 2 decimal places.)

Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 870,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.40. The market value of the company’s common stock at the end of the year was $21.50. All of the company’s sales are on account.

Explanation / Answer

No of share=8700000 in thousand it would be 870

Earning PerShare=Net Income/No. of shares outstanding= $4620/870= $5.31

Price Earning ratio= Market price per share/EPS= $21.5/$5.31= $4.05

Dividend Payout Ratio=Total Dividends/Net Income=$348/4620= $.08

Dividend Yield Ratio=Cash Divident per share/Market value per share= $.08/21.5=$.004

Book Value Per share= Total sharehoders Equity/No. of shares outstanding=$37052/870=$42.59

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