Nataro, Incorporated, has sales of $654,000, costs of $333,000 , depreciation expense of $78,000, interest

Nataro, Incorporated, has sales of $654,000, costs of $333,000 , depreciation expense of $78,000, interest expense of $43,000, and a tax rate of 25 percent. The firm paid out $73,000 in cash dividends and has 36,000 shares of common stock outstanding.

a. What is the earnings per share, or EPS, figure? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

b. What is the dividends per share figure? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

Solutions

Expert Solution

Calculation of Total Income

Formulae:

(a)

Earnings per share (EPS) = Net Income / Common Shares Outstanding

= 150000 / 36000

= $ 4.166666666

= $ 4.17 (rounded off)

The Earnings per share (EPS) is $ 4.17.

(b)

Dividend Per Share = Cash Dividend / Common Shares Outstanding

= 73000 / 36000

= $ 2.0277777777

= $ 2.03 (rounded off)

The Dividend per Share is $ 2.03.

(a) The Earnings per share (EPS) is $ 4.17.

(b) The Dividend per Share is $ 2.03.

Junaid answered 1 year ago

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