Question

Recher Corporation's common stock has a par value of $3 per share and has been stable...

Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years. The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market price of common stock at the end of the year was $3.76 per share.

1. The company's earnings per share is closest to:

2. The company's price-earnings ratio is closest to:

3. The company's dividend payout ratio is closest to:

4. The company's dividend yield ratio is closest to:

5. The company's book value per share at the end of the year is closest to:

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Homework Answers

Answer #1

Ans:

Earning Per Share

= Net Income/No of Shares

=17500/(270000/3)

0.194

Dividend Payout Ratio

= Divined Per share/ Earning Per Share

4500/90000=0.05

=0.05/0.194

25.77%

Dividend Yield Ratio

= Dividend Per Share/ Market Value Per Share

=0.05/3.76

=1.33%

Price Earning Ratio

= Market Price Per Share/ Earning Per share

=3.76/0.194

19.38

Book Value Per Share

= Total Shareholder's Equity/ No of Shares

=1016500/90,000)

11.29

Hope this helped ! Let me know in case of any queries.

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