Question

Makers Corp. had additions to retained earnings for the year just ended of $261,000. The firm paid out $194,000 in cash dividends, and it has ending total equity of $4.99 million. The company currently has 130,000 shares of common stock outstanding.

  

a.

What are earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b. What are dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
d. If the stock currently sells for $74 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
e. What is the price-earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
f. If the company had sales of $4.55 million, what is the price-sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

a) Addition to retianed earning = $261,000

cash dividend = $194,000

equity = $4.99M

shares outstanding = 130,000

Net income = retained earning +dividend

= 261000+194000 = $455,000

earning per share = net income/ total no. of shares outstanding

= 455,000/130,000= 3.5 times

b)dividend per share = dividend/ no. of shares = 194000/130000 = 1.49 times

c)book value per share = total equity / no. of shares = 4.99 million/ 130,000 = $38.39 per share

d) market/book ratio = Share price/book value per share = 74/38.39 = 1.93 times

e) price -earning ratio = share price/EPS = 74/ 3.5= 21.14 times

f) price -sales ratio = share price/ sales per share = 74/4.55/130000 = 74/35000 = 74/35= 2.11 times

Thanks