Question

# 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 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

=(14.1-2.14*0.9)/9

=\$ 1.3527 per share

(d)Dividend payout ratio = Dividend per share to common stock holder / Earning per share

=0.78/1.3527

=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%