XYZ Company has sales of $4,800,000, COGS is 40% of sales, operating expenses ar

Question

XYZ Company has sales of $4,800,000, COGS is 40% of sales, operating expenses are $2,100,000, interest expense $20,000 and depreciation 30,000. Tax rate 40%. Construct their income statement and answer the below.

5. They have 100,000 shares of common stock outstanding, what is their dividend per share? Round to hundredth

1.75

.96

2.74

2.70

6. What is their EPS?

4.80

4.38

4.56

2.40

7. What is the current dividend yield if P0 is $50? Taken to tenth

8.8%

5.4%

5.5%

3.5%

8. If they were to change their dividend payout to 50%, what would their dividend per share be?

Explanation / Answer

Statement showing computation of income Particulars Amount Sales          4,800,000.00 COGS@40%          1,920,000.00 Gross Profit          2,880,000.00 Operating Expenses          2,100,000.00 Operating Income              780,000.00 Depreciation                30,000.00 EBIT              750,000.00 Interest                20,000.00 EBT              730,000.00 Tax @40%              292,000.00 EAT or earning for eq S/H              438,000.00 No of shares              100,000.00 6) EPS = 438,000/100,000                           4.38 5) Dividend @40% = 4.38*.4                           1.75 7) Current Yield = 1.75/50 3.5% 8) Payout 50% = 4.38*50%                           2.19

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