Question

The following information is given about Global Electronic Co. for the year 2009: Net Sales $2,000,000...

The following information is given about Global Electronic Co. for the year 2009:
Net Sales $2,000,000
Return on Equity 25%
Debt to Equity ratio 30%
Net profit margin 5%
Number of common stocks outstanding 20,000 shares, Preferred stocks (5%, $100 par, and 1,000 shares issued) and no change in the number of common stocks outstanding.
P/B (Market Price to Book value per share) 2.3 times
Percentage of earning retained 40%
Instructions: Find the following: (a) Market Price per Common Shares. (b) Dividend per common shares (c) Total Assets. (d) Dividend Payout.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer 1

Net Profit = Net Sales * Net Profit Margin = 2000000*5% = 100,000

Earnings Available to Equity Shares = Net Profit - Pref Dividend = 100,000 - (5%*100*1000) = 95000

No of Outstanding Shares = 20000

Earnings Per Share = Earning available for Equity / No of Equity Shares = 95000 / 20000 = $ 4.75

Market Price Per Share = Earnings Per Share / ROE = 4.75 / 25% = $19

Answer 2

Dividend Per Share = Earnings Per Share* (1 - Percentage of Earnings retained) = 4.75*(1-0.40) = $ 2.85

Answer 3  

ROE = Asset Turnover*Profit Margin*Debt Equity Ratio

0.25 = Assets Turnover*0.05*0.30

Assets Turnover = 0.25 /(0.05*0.30) = 16.667 times

Assets Turnover = Sales / Assets

16.67 = 2000000 / Assets

Assets = $ 120000

Answer 4  

Dividend Payout Ratio = Dividend Per Share / Earning Per Share = 2.85 / 4.75 = 0.60 or 60%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following information pertains to Parsons Co.:       Preferred stock, cumulative:             Par per share          &n
The following information pertains to Parsons Co.:       Preferred stock, cumulative:             Par per share                                                                                                      $100             Dividend rate                                                                                                         8%             Shares outstanding                                                                                          10,000             Dividends in arrears                                                                                            none       Common stock:             Par per share                                                                                                        $10             Shares issued                                                                                                120,000             Dividends paid per share                                                                                   $2.70             Market price per share                                                                                    $48.00       Additional paid-in capital                                                                                    $400,000       Unappropriated retained earnings (after closing)                                              $270,000       Retained earnings appropriated for contingencies                                            $300,000       Common treasury stock:             Number of shares                                                                                           ...
Consider the following information about Truly Good​ Coffee, Inc.: Total assets ($millions)   178 Total debt ($millions)  ...
Consider the following information about Truly Good​ Coffee, Inc.: Total assets ($millions)   178 Total debt ($millions)   86 Preferred stock ($millions)   17 Common stockholders' equity ($millions)   75 Net profit after taxes ($millions)   14.1 Number of preferred stock outstanding (millions)   0.9 Number of common stock outstanding (millions)   9 Preferred dividends paid (per share)   2.14 Common dividends paid (per share)   0.78 Market price of the preferred stock ($/per share)   24.64 Market price of the common stock ($/per share)   19.61 . Use the information...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year 1, is as follows: Stockholders’ Equity Paid-in capital Preferred stock, ? par value, 5% cumulative, 140,000 shares authorized, 44,000 shares issued and outstanding $ 440,000 Common stock, $20 stated value, 190,000 shares authorized, 44,000 shares issued and outstanding 880,000 Paid-in capital in excess of par—Preferred 34,000 Paid-in capital in excess of stated value—Common 66,000 Total paid-in capital 1,420,000 Retained earnings 290,000 Total stockholders’ equity...
The following information pertains to Parsons Co.: Preferred stock, cumulative: Par value per share $100 Dividend...
The following information pertains to Parsons Co.: Preferred stock, cumulative: Par value per share $100 Dividend rate 8% Shares outstanding 10,000 Dividends in arrears none Common stock: Par value per share $10 Shares issued 115,000 Dividends paid per share $2.20 Market price per share $49 Additional paid-in capital $520,000 Unappropriated retained earnings (after closing) $250,000 Retained earnings appropriated for contingencies $280,000 Common treasury stock: Number of shares 10,000 Total cost $260,000 Net income
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year 2, is as follows. Stockholders’ Equity Paid-in capital Preferred stock, ? par value, 6% cumulative, 250,000 shares authorized, 55,000 shares issued and outstanding $ 550,000 Common stock, $20 stated value, 300,000 shares authorized, 55,000 shares issued and ?? shares outstanding 1,100,000 Paid-in capital in excess of par—Preferred 45,000 Paid-in capital in excess of stated value—Common 165,000 Total paid-in capital $ 1,860,000 Retained earnings 400,000...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year 1, is as follows: Stockholders’ Equity Paid-in capital Preferred stock, ? par value, 5% cumulative, 140,000 shares authorized, 44,000 shares issued and outstanding $ 440,000 Common stock, $20 stated value, 190,000 shares authorized, 44,000 shares issued and outstanding 880,000 Paid-in capital in excess of par—Preferred 34,000 Paid-in capital in excess of stated value—Common 66,000 Total paid-in capital 1,420,000 Retained earnings 290,000 Total stockholders’ equity...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, 2018,...
The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, 2018, is as follows. Stockholders’ Equity Paid-in capital Preferred stock,? par value, 4% cumulative, 270,000 shares authorized, 57,000 shares issued and outstanding $ 570,000 Common stock, $25 stated value, 320,000 shares authorized, 57,000?? shares issued and outstanding 1,425,000 Paid-in capital in excess of par—Preferred 47,000 Paid-in capital in excess of stated value—Common 114,000 Total paid-in capital 2,156,000 Retained earnings 420,000 Treasury stock, 6,000 shares (42,000...
The stockholders' equity section of Wildhorse Co. balance sheet at December 31 is presented here: WILDHORSE...
The stockholders' equity section of Wildhorse Co. balance sheet at December 31 is presented here: WILDHORSE CO. Balance Sheet (partial) Stockholders' equity   Paid-in capital     Preferred stock, cumulative, 11,000 shares authorized,       6,000 shares issued and outstanding $600,000     Common stock, no par, 750,000 shares authorized,       600,000 shares issued 6,000,000       Total paid-in capital 6,600,000   Retained earnings 1,450,000   Total paid-in capital and retained earnings 8,050,000   Less: Treasury stock (5,000 common shares) 41,000 Total stockholders' equity $8,009,000 From a review of the stockholders' equity section,...
The information below pertains to Baker Co. for 2017. Net income – 2017 $1,200,000 8% convertible...
The information below pertains to Baker Co. for 2017. Net income – 2017 $1,200,000 8% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock $2,000,000 6% convertible, non-cumulative, preferred stock, $100 par value, each share is convertible into 3 shares of common stock $4,000,000 Common stock, $10 par value $6,000,000 Tax rate for 2017 40% Average market share price of common stock for 2017 $25 per share The company did have...
you are the CFO of the Imaginary Products Co. the company provides the following information about...
you are the CFO of the Imaginary Products Co. the company provides the following information about its capital structure: Debt: the firm has 200,00 bonds outstanding with a pair value of $1,000, pays 9 percent interest (semi- annual coupon payments), have a maturity of 15 years and have a quoted price of 137.55 per bond. preferred shares: the firm also has an issue of 2 million preferred shares outstanding with a market price of $12.00 per share. the preferred shares...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT