Billy’s Exterminators, Inc., has sales of $752,000, costs of $312,000, depreciat
ID: 2749757 • Letter: B
Question
Billy’s Exterminators, Inc., has sales of $752,000, costs of $312,000, depreciation expense of $64,000, interest expense of $42,000, a tax rate of 35 percent, and paid out $57,600 in cash dividends. The firm has 120,000 shares of common stock outstanding.
What are the earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What are the dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Billy’s Exterminators, Inc., has sales of $752,000, costs of $312,000, depreciation expense of $64,000, interest expense of $42,000, a tax rate of 35 percent, and paid out $57,600 in cash dividends. The firm has 120,000 shares of common stock outstanding.
Explanation / Answer
a. Sales = $752,000
Less : Costs $ 312,000
Depreciation $ 64,000
Profit before Interest and Taxes = $376,000
Less Interest $42,000
Profit before Taxes = 334,000
Less Taxes = 116,900
Profit after taxes for shareholder's = 217,100
Total Number of common stock outstanding = 120,000
Thus , earning Per Share = Earning available for Shareholders/Total Number of common stock outstanding
= 1.809
b. Total dividend paid = $ 57,600
Total Number of common stock outstanding = 120,000
Thus, divdend per share= Total dividend paid/Total Number of common stock outstanding
= $ 57,600/ 120,000
= 0.475
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