Lifeline, Inc., has sales of $604,000, costs of $254,000, depreciation expense o

Question

Lifeline, Inc., has sales of $604,000, costs of $254,000, depreciation expense of $61,500, interest expense of $28,500, and a tax rate of 35 percent. The firm paid out $45,500 in cash dividends and has 59,000 shares of common stock outstanding.

Requirement 1:
What are the earnings per share? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16))

Earnings per share $

Requirement 2:
What are the dividends per share? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16))

Dividends per share $

Explanation / Answer

Total Sales= $604000

Total costs = 254000 + 61500 + 28500 = $344000

Earnings before tax = $260000

Tax= 35/100 * 260000 = $91000

Earnings after tax = $169000

Earnings per share =169000/59000 = 2.86

Dividends per share = 45500/59000 =0.77

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