Starbucks has 50,000,000 shares of common stock outstanding, its net income is $51,750,000, and its P/E...

Starbucks has 50,000,000 shares of common stock outstanding, its net income is $51,750,000, and its P/E is 8. What is the company's stock price? What is its dividend payout ratio if it paid $0.70 per share?

Solutions

Expert Solution

EPS=Net income/Common stock outstanding

=51,750,000/50,000,000

=$1.035 per share

P/E ratio=stock price/EPS

Hence stock price=1.035*8

=$8.28

Dividend payout ratio=Dividend/Earnings per share

=(0.7/1.035)

=0.6763(or 67.63% approx)

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

6. Moon Corporation (E&P of $700,000) has 4,000 shares of common stock outstanding. The shares are...

6. Moon Corporation (E&P of $700,000) has 4,000 shares of common stock outstanding. The shares are owned as follows: Andy 2,000 shares Darlene (Andy’s daughter) 1,500 shares Wendy (Andy’s aunt) 500 shares In the current year, Moon redeems all of Andy’s shares. Determine whether the redemption can qualify for sale or exchange treatment under the complete termination of a shareholder’s interest rules in each of the following independent circumstances. Assume that in a. – d Andy completes and submits the...

Lopez Corporation (E & P of $1 million) has 2,000 shares of common stock outstanding owned...

Lopez Corporation (E & P of $1 million) has 2,000 shares of common stock outstanding owned by unrelated parties as follows: Kaylee, 1,000 shares, and Damek, 1,000 shares. Both Kaylee and Damek paid $150 per share for the Lopez stock 12 years ago. In May of the current year, Lopez distributes land held as an investment (basis of $180,000, fair market value of $390,000) to Kaylee in redemption of 350 of her shares. a. What are the tax results to...

Coleman Corporation (E&P of $720,000) has 3,000 shares of common stock outstanding. Fred owns 1,500 shares...

Coleman Corporation (E&P of $720,000) has 3,000 shares of common stock outstanding. Fred owns 1,500 shares and his wife, Angelia, owns 1,500 shares. Fred and Angelia each have a basis of $90,000 in their Coleman Corporation stock. In the current year, Coleman Corporation redeems 1,000 shares from Fred for $250,000. With respect to the distribution in redemption of Fred's stock in Coleman Corporation: Group of answer choices Fred has dividend income of $250,000. Fred has a capital gain of $190,000...

A company has net income of $910,000; its weighted-average common shares outstanding are 182,000. Its dividend...

A company has net income of $910,000; its weighted-average common shares outstanding are 182,000. Its dividend per share is $0.55, its market price per share is $90, and its book value per share is $79.00. Its price-earnings ratio equals: 15.80. 18.00. 11.00. 11.55. 10.45.

Midland Corporation has a net income of $15 million and 6 million shares outstanding. Its common...

Midland Corporation has a net income of $15 million and 6 million shares outstanding. Its common stock is currently selling for $40 per share. Midland plans to sell common stock to set up a major new production facility with a net cost of $21,660,000. The production facility will not produce a profit for one year, and then it is expected to earn a 15 percent return on the investment. Wood and Gundy, an investment dealer, plans to sell the issue...

Tabb Corp has 9,293 shares of common stock outstanding at the beginning of the year. Net...

Tabb Corp has 9,293 shares of common stock outstanding at the beginning of the year. Net income was $359,293. No dividends were paid this year nor last year. On March 1st, the company purchased 2,000 shares of its common stock and held it in treasury. There was a 2 for 1 stock split that occurred on common stock on Dec. 1. The tax rate is 30%. A $1,500,000, 5% nonconvertible bond was issued June 30 of the current year at...

Throughout 2015, Smith had 200,000 shares of common stock outstanding. Smith's net income for the year...

Throughout 2015, Smith had 200,000 shares of common stock outstanding. Smith's net income for the year ended December 31, 2015 was $800,000. Smith's income tax rate is 20%. During 2015, Smith declared and paid dividends on its 10,000 shares of 6% convertible preferred $100 par value stock. Each share of the convertible preferred stock can be converted, at the discretion of the stockholder, into 3 shares of Smith's common stock. During the entire year ending 12-31-15, Smith had 15,000 outstanding...

Pealand Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding....

Pealand Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $1.00 par value. The preffered stock has a $100 par value, a 5% dividend rate, and is noncumulative. On October 31, 2015, the company declares dividends of $0.25 per share for common. Provide the journal entry for the declaration of dividends.

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding,...

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding, and 40,000 bonds. If the common shares are selling for $25 per share, the preferred shares are selling for $12.50 per share, and the bonds are selling for 97 percent of par, what would be the weight used for common stock equity in the computation of Spicer's WACC? A. 18.59% B. 19.49% C. 24.37% D. 62.50% E. 79.75% Comfort Chair, Inc. has a $1.5...

Net income for the company for the year was $300,000, and 100,000 shares of common stock...

Net income for the company for the year was $300,000, and 100,000 shares of common stock were outstanding during the year. The income tax rate is 30%. For each of the following potentially dilutive securities, perform the shortcut antidilution test to determine whether the security is dilutive. Assume that each of the securities was issued on or before January 1. Treat each security independently; in other words, when testing one security, assume that the others do not exist. (10)...

Subjects