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 Finn Resources Inc. for December 31 of the current fiscal year:

The net income was $914,000 and the declared dividends on the common stock were $127,600 for the current year. The market price of the common stock is $22.1 per share.

For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places.

Common stock, $40 par value (no change during the year) $11,600,000 Preferred $4 stock, $100 par (no change during the year) 4,000,000

Explanation / Answer

Answer Formula a. Earnings per Share $         3.15 =Net income/ No. of equity shares b. Price-Earnings Ratio $         7.01 =Market price/ EPS c. Dividends per Share 0.44 =dividend/no. of equity shares d. Dividend Yield            1.99 % =Dividend per share/Market price

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