(PLEASE SHOW ALL WORK AND FORMULAS USED) ((PLEASE SHOW ALL WORK AND FORMULAS)) 2
ID: 2813329 • Letter: #
Question
(PLEASE SHOW ALL WORK AND FORMULAS USED)
((PLEASE SHOW ALL WORK AND FORMULAS))
26) Bethesda Co. had additions to retained earnings for the year just ended of S275,000. The firm paid out $150,000 in cash dividends, and it has ending total equity of S6 million. If Bethesda currently has 125,000 shares of common stock outstanding, what are earnings per share? Dividends per share? Book value per share? If the stock currently sells for S95 per share, what is the market to book ratio? The price earnings ratio?Explanation / Answer
Earnings per share = (Retained earning + Dividend payout) / Total number of shares
Earnings per share = (275000 + 150000) / 125000
EPS = $3.4
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Dividend per share = Dividend payout / Total number of shares
Dividend per share = 150000 / 125000
Dividend per share = $1.2
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Book value per share = Total equity / Total number of shares
Book value per share = 6000000 / 125000
Book value per share = $48
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Market to book ratio = Market price / Book value per share
Market to book ratio = 95 / 48
Market to book ratio = 1.979166667 = 1.98
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Price-Earnings Ratio = Market price / EPS
Price-Earnings Ratio = 95 / 3.4
PE Ratio = 27.94117647
PE ratio = 27.94
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