5. value 10.00 points Tantallon Inc. is a publicly traded company. During its ye

Question

5. value 10.00 points Tantallon Inc. is a publicly traded company. During its year ended December 31, 2018, Tantallon reported net income of $11,929,500. During fiscal 2018, Tantallon declared and paid dividends of $.09 per share on ts 100,100,000 outstanding common shares. During the year, no shares were issued and none were repurchased from investors. In addition, Tantallon paid $505,000 in preferred dividends. On December 31, 2018, Tantallon's common share price was $5.85. Required Calculate the following ratios for 2018 a. Basic earnings per share for the year ended December 31, 2018 (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Basic earnings per share b. Price-to-earnings ratio on December 31, 2018 (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Price-to-earnings ratio c. Dividend payout ratio for the year ended December 31, 2018 (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Dividend payout ratio d. Dividend yield on December 31, 2018 (Do not round your intermediate calculations. Round your answer to 1 decimal place.) Dividend yield

Explanation / Answer

A)

Basic EPS = (Net income - Preferred dividend) / Outstanding Common shares

=($11,929,500 - $505,000) / 100,100,000

=$0.11 per share

B)

Price earnings ratio = Market price per share / Earnings per share

=$5.85 / $0.11

=53.18

C)

Dividend payout ratio = Dividend per share / Earnings per share

=($0.09 / $0.11)*100

=81.82%

D)

Dividend yield ratio = (Dividend per share / Market price per share)*100

=($0.09 / $5.85)*100

=1.54%

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