Question

Ostuni Limited is a Niagara-on-the-Lake, Ontario–based winery producing blended, premium, and ultrapremium wines, which are sold...

Ostuni Limited is a Niagara-on-the-Lake, Ontario–based winery producing blended, premium, and ultrapremium wines, which are sold globally. The company has a strong distribution network in Canada through independent retail locations. The following information has been extracted from the company’s annual report.

2020 2019 2018
Market price per share $11.10 $7.41 $5.34
Earnings per share $0.67 $0.47 $0.36
Dividends per share $0.177 $0.160 $0.127
Net income (in thousands) $21,498 $15,632 $12,187
Shareholders’ equity (in thousands) $178,026 $158,409 $147,176

A) Calculate Ostuni’s price/earnings ratio from 2018 through 2020. (Round answers to 1 decimal place, e.g. 15.2.)

2020 2019 2018
Price/earnings ratio

B) Calculate Ostuni’s dividend payout ratio and dividend yield for 2018 through 2020.

2020 2019 2018
Dividend payout ratio % % %
Dividend yield % %

C) Calculate Ostuni’s return on equity ratio for 2019 and 2020. Note that Ostuni’s articles of incorporation authorize only common shares.

2020 2019
Return on equity ratio %
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