Question

# Earnings per Share, Price-Earnings Ratio, Dividend Yield The following information was taken from the financial statements...

Earnings per Share, Price-Earnings Ratio, Dividend Yield

The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year:

 Common stock, \$15 par value (no change during the year) \$2,400,000 Preferred \$10 stock, \$200 par (no change during the year) 4,000,000

The net income was \$712,000 and the declared dividends on the common stock were \$40,000 for the current year. The market price of the common stock is \$24.00 per share.

For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places.

 a. Earnings per Share \$ b. Price-Earnings Ratio c. Dividends per Share \$ d. Dividend Yield %

#### Homework Answers

Answer #1
 Earning Per share = Net income / Average number of shares outstanding Earning Per share = \$712,000 / (\$2,400,000/\$15) Earning Per share = \$4.45 Price Earning Ratio = Market Value per Share / Earnings per Share Price Earning Ratio = \$24 / \$4.45 Price Earning Ratio = 5.39 Dividend per share = Total dividends / Number of shares outstanding Dividend per share = \$40,000 / (\$2,400,000/\$15) Dividend per share = \$0.25 Dividend Yield Ratio = Dividend per share/current share price Dividend Yield Ratio = \$0.25 / \$24 Dividend Yield Ratio = 1.04%

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