1) A bottled gas company has 500,000 common shares authorized, 400,000 common sh

Question

1) A bottled gas company has 500,000 common shares authorized, 400,000 common shares issued and 15,000 common shares in treasury stock at the current year-end. It paid $0.24 per share in cash dividends during the year. The year-end market price of the stock is $15. Calculate (1) the total dividends paid and (2) the dividend yield.

2)A welding company, specializing in underwater projects, has 1,000 shares of $100 par preferred stock. It also has 25,000 shares of common stock outstanding and its total stockholders' equity equals $500,000. The book value per common share is:

Thank you!

Explanation / Answer

1)

a) 0.24*(400,000 + 15,000) = $99,600

b) 0.24/15 = 0.016 = 1.6 %

2)

(500,000 - 1000*100)/25,000 = $ 16

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