Question

The following are questions for discussion assignment. Could you please assist me with these questions? Thank you. +

Using the following:- Sony SEC 10-K: a. Return on stockholder's equity: = (net income - preferred dividends)/average stockholder's equity b. Earnings per share (EPS) c. Price-earnings (PE) ratio d. Payout ratio

Answer 1

Return on stockholders equity =

(Net income - preferred dividend) / average stockholders equity

Net income is the total income of the company before paying the dividend to the common stockholders. Also EPS gives us earning per share which is calculated on net income available to common stockholders after the Dividend is paid to them.

Payout ratio is the ratio which the company calculates with the amount of dividend paid out of their total income.

Also price earning ratio is the ratio between the company share price and its earning per share.

Therefore the correct option is A i e. (Net income - dividend to preferred) / average stockholders equity.

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