Billy's Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense...

Billy's Exterminators, Inc., has sales of $817,000, costs of $343,000, depreciation expense of $51,000, interest expense of $38,000, and a tax rate of 21 percent. The firm just paid out $95,000 in cash dividends. The company has 90,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share?

Expert Solution

Sales	817000
Less:costs	343000
Less:depreciation	51000
EBIT	$423000
Less:interest expense	38000
EBT	$385000
Less:tax@21%($385000*21%)	$80850
Net income	$304150

a.EPS=Net income/Common stock outstanding

=$304150/90,000

=3.38(Approx).

b.Dividend per share=Dividend/Common stock outstanding

=(95000/90,000)

=1.06(Approx).

jeff jeffy answered 2 years ago

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