The following information was taken from the financial statements of Tolbert Inc

Question

The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year Common stock, $30 par value (no change during the year) Preferred $10 stock, $100 par (no change during the year) The net income was $73 $15.30 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, $7,200,000 3,000,000 2,000 and the decdared dividends on the common stock were $60,000 for the current year. The market price of the common stock is round your answers to two decimal places. a. Earnings per Share b. Price-Earnings Ratio c. Dividends per Share d. Dividend Yield Previous Next

Explanation / Answer

Answer to part a

Earning per share = Net Income / Total no. of equity share

= $732000 / 240000

= $3.05

W.Note :

Total no of equity share = Common stock / par value

= $7200000 / 30 = $240000

Answer to part b

Price Earning Ratio = MPS / EPS

= $15.30 / 3.05

= 5.02

Answer to part C

Dividend per share = Dividend paid to equity shareholder / Total no of equity shares

= $60000 / 240000

= $0.25

Answer to part d

Dividend Yield = Dividend per share / Market price per share

=$ 0.25 / 15.30

= 1.63%

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