DataWeb reported the following in the most recent year of operations: Earnings per Share $5.60 Dividends...

DataWeb reported the following in the most recent year of operations:

Earnings per Share	$5.60
Dividends per Share	$1.68
Stock price	$84.00

Compute the Price-earnings ratio (P/E), dividend yield (DY) and dividend payout ratio (PAYO).

The following data pertain to Marseilles Labs:

	Sales
July	$100,000
August	$230,000
September	$175,000

In the month of sales, one-quarter (25%) are cash and the other 75% are sold on credit, and collected in the following month.

Compute Marseilles Labs cash receipts in September.

Expert Solution

Solution:

Price Earning Ratio = Current Stock Price/Earnings per share
$84/$5.60
15.00
Price Earning Ratio = 15 Times

Dividend Yield = Dividend per share/ Current Stock Price
$1.68/$84
0.02

Dividend Yield = 0.02 or 2%


Dividend Payout Ratio = Dividend per share/ Earning per share
$1.68/$5.60*100
30
Dividend Payout Ratio = 30%


Marseilles Labs Cash receipts

		July	August	September
Sales	$	100000	230000	175000

Cash Sales 25% of Sales (A)	$	25000	57500	43750
		(100000*25%)	(230000*25%)	(175000*25%)
Credit Sales collected in next month of Sale 75% of Sale (B)	$		75000	172500
			(100000*75%)	(230000*75%)
Cash Receipts (A + B)	$		132500	216250

Cash Receipts in September = $216250

jeff jeffy answered 1 year ago

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