Examen 3 (cap 13 y 14) CONT 3006 Nayla N. Bácz Román, Ph.D. I. Multiple Choice:

Question

Examen 3 (cap 13 y 14) CONT 3006 Nayla N. Bácz Román, Ph.D. I. Multiple Choice: show all calculations A company had a beginning balance in retained earnings of$430,000. It had net income of s60,000 and paid out cash dividends of $56,250 in the current period. The ending balance in retained earnings equals: 1. a. $546,250 b. $426,250 c. $116,250 d. $433,750 e. $490,000 2. Mayan Company had net income of $1 32,000. The weighted-average common shares outstanding were 80,000. The company sold 3,000 shares before the end of the year. There were no other stock transactions. The company's earnings per share is: a. $1.65 b. $1.59 c. $44.00 d. $26.67 3. A company has earnings per share net income of $90,000; its weighted-average common shares outstanding are 18,000. Its dividend per share is $0.45, its market price per share is $88, and its book value per share is $76. Its price-carnings ratio equals: a. 9.0 c. 12.5 d. 15.2 e. 16.9 4. A company paid $0.48 in cash dividends per share. Its carnings per share is $3.20 and its market price per share is $20.00. Its dividend yield equals: a. 2.4% b, 6.25% c. 6.4% d. 6.67% e. 15.00% 5. A company has 50,000 shares of common stock outstanding. The stockholders equity applicable to common shares is S1,470,000, and the par value per common share is $5. The book value per share is: a $4.75 b. $14.70 c. $10.00 d. $29.40 e. $47.50

Explanation / Answer

1 Ending balance in Retained earnings = 430000+60000-56250= 433750 2 Earnings per share = (132000/80000)= 1.65 3 Earnings per share = (90000/18000)=$5 Price-earnings ratio = 88/5= 17.6 4 Dividend yield = 0.48/20= 2.4% 5 Book value per share=(1470000/50000)= 29.4

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