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

12.

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) \$3,750,000 Preferred \$10 stock, \$200 par (no change during the year) 6,000,000

The net income was \$1,050,000 and the declared dividends on the common stock were \$62,500 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 %

 preferred dividends (preferred stock / par value) * stock value (6000000 / 200) * 10 total preferred dividends 300000 earnings per share (net income - preferred dividends)/shares outstanding net income 1050000 preferred dividends 300000 no.of common shares outstanding 250000 earnings per share (\$) 3 price-earnings ratio market price per share / earnings per share market price per share 24 earnings price per share 3 price-earnings ratio 8 dividends per share total common dividends paid / no.of shares outstanding total common dividends paid 62500 no.of common shares outstanding 250000 dividends per share (\$) 0.25 dividend yield annual dividend per share / market price per share dividends per share 0.25 market price per share 24 dividend yield 1.04%

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