That Wich Corp. had additions to retained earnings for the year just ended of $2
ID: 2703207 • Letter: T
Question
That Wich Corp. had additions to retained earnings for the year just ended of $261,000. The firm paid out $194,000 in cash dividends, and it has ending total equity of $4.99 million. The company currently has 130,000 shares of common stock outstanding.
What are earnings per share? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
If the stock currently sells for $74 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
What is the price
What are earnings per share? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Explanation / Answer
Question 1). Solution :- Earnings per share = Net income / Number of shares of common stock outstanding.
= 455000 / 130000
= $ 3.50 per share.
(Note :- Net income = Dividend paid + Addition to retained earnings = 194000 + 261000 = $ 455000).
Question 2). Solution :- Dividend per share = Dividend paid / Number of shares of common stock outstanding.
= 194000 / 130000
= $ 1.49 per share.
Question 3). Solution :- Book value per share = Total equity / Number of shares of common stock outstanding.
= 4990000 / 130000
= $ 38.38 per share.
Question 4). Solution :- Market to book ratio = Market value per share / Book value per share.
= 74 / 38.38
= $ 1.93 Times.
Conclusion :-
1). Earnings per share $ 3.50 per share. 2). Dividend per share $ 1.49 per share. 3). Book value per share $ 38.38 per share. 4). Market to book ratio $ 1.93 Times.Related Questions
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