In: Finance
Rossdale, Inc., had additions to retained earnings for the year
just ended of $633,000. The firm paid out $90,000 in cash
dividends, and it has ending total equity of $7.28 million.
If the company currently has 650,000 shares of common stock
outstanding, what are earnings per share? Dividends per share? What
is book value per share? (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g.,
32.16.)
Earnings per share | $ |
Dividends per share | $ |
Book value per share | $ |
If the stock currently sells for $29.80 per share, what is the market-to-book ratio? The price−earnings ratio? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Market-to-book ratio | times | |
Price−earnings ratio | times | |
If total sales were $10.58 million, what is the price−sales
ratio? (Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
Price−sales ratio
times
Answer a.
Additions to Retained Earnings = Net Income - Cash
Dividends
$633,000 = Net Income - $90,000
Net Income = $723,000
Earnings per share = Net Income / Number of shares
outstanding
Earnings per share = $723,000 / 650,000
Earnings per share = $1.11
Answer b.
Dividends per share = Cash Dividends / Number of shares
outstanding
Dividends per share = $90,000 / 650,000
Dividends per share = $0.14
Answer c.
Book Value per share = Ending Total Equity / Number of shares
outstanding
Book Value per share = $7,280,000 / 650,000
Book Value per share = $11.20
Answer d.
Market-to-book Ratio = Current Price per share / Book Value per
share
Market-to-book Ratio = $29.80 / $11.20
Market-to-book Ratio = 2.66 times
Answer e.
Price-earnings Ratio = Current Price per share / Earnings per
share
Price-earnings Ratio = $29.80 / $1.11
Price-earnings Ratio = 26.85 times
Answer f.
Sales per share = Total Sales / Number of shares
outstanding
Sales per share = $10,580,000 / 650,000
Sales per share = $16.28
Price-sales Ratio = Current Price per share / Sales per
share
Price-sales Ratio = $29.80 / $16.28
Price-sales Ratio = 1.83 times