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Use the information below to calculate the following ratios for Allen Ales in 20Y6: earnings per...

Use the information below to calculate the following ratios for Allen Ales in 20Y6: earnings per share on common stock, price-earnings ratio, dividends per share, and dividend yield. The company paid $2,500 in preferred dividends for the year. Round ratios to one decimal place.

Net income

$275,300

Shares of common stock outstanding

5,750 shares

Market price per share of common stock

$4.80

Dividends on common stock

$10,900

Solutions

Expert Solution

EPS = Net earnings / number of common share

       = 275300/ 5750

        = $47.88

Price – earnings ratio = Price/ eps

                                       = 4.8/ 47.88

                                       = .1

Dividend per share = 10900/ 5750

                                   = 1.89

Dividend yield = Dividend per share/ share price

                            = 1.89/ 4.8

                            = .3949 or 39.49%

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Hope that helps.

Feel free to comment if you need further assistance J

jeff jeffy answered 2 years ago
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