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 in the table to find the following:
a. The company's book value.
b. Its book value per share.
c. The stock's earnings per share (EPS).
d. The dividend payout ratio.
e. The dividend yield on the common stock.
f. The dividend yield on the preferred stock.
(a)Company 's book value = Amount of stockholders equity in the books which is given in question = $75 million
(b)Book value per share =Book value / Number of common stock outstanding = 75/9=$ 8.33 per share
(c) Earning per share = (Net profit after taxes - preferred dividend)/Number of common stock outstanding
=$ 1.3527 per share
(d)Dividend payout ratio = Dividend per share to common stock holder / Earning per share
=0.5766 or 57.66 %
(e)dividend yield on common stock = Common dividend per share /Market price of common stock
= 0.78/19.61=0.0398 or 3.98%
(f)dividend yield on preferred stock = Preferred dividend per share / Market price of preferred stock
= 2.14/24.64=0.0869 or 8.69%
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