The financial statements of Trail Apparel include the following selected data (in millions):($ in thousands, except stock price)Sales20202021$729,92016,1004,160240,15045,0005.90$754,85814,2203,080224,45037,0004.50Net incomeDividendsStockholders' equity, end of yearShares outstandingAverage stock price$Required:Calculate the following amounts for 2021: (Round 'Earning Per Share' to 2 decimal places.)Return on equity1Dividend yield2.3. Earnings per share4. Price-earnings ratio

Question
Asked Nov 5, 2019

Q. question 9

The financial statements of Trail Apparel include the following selected data (in millions):
($ in thousands, except stock price)
Sales
2020
2021
$729,920
16,100
4,160
240,150
45,000
5.90
$754,858
14,220
3,080
224,450
37,000
4.50
Net income
Dividends
Stockholders' equity, end of year
Shares outstanding
Average stock price
$
Required:
Calculate the following amounts for 2021: (Round 'Earning Per Share' to 2 decimal places.)
Return on equity
1
Dividend yield
2.
3. Earnings per share
4. Price-earnings ratio
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The financial statements of Trail Apparel include the following selected data (in millions): ($ in thousands, except stock price) Sales 2020 2021 $729,920 16,100 4,160 240,150 45,000 5.90 $754,858 14,220 3,080 224,450 37,000 4.50 Net income Dividends Stockholders' equity, end of year Shares outstanding Average stock price $ Required: Calculate the following amounts for 2021: (Round 'Earning Per Share' to 2 decimal places.) Return on equity 1 Dividend yield 2. 3. Earnings per share 4. Price-earnings ratio

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Step 1

Hence, return on equity for 2021 is 6.9%. It is obtained by the division of net income and the average shareholder's equity. Average shareholder’s equity is obtained by addition of opening and closing shareholder’s equity and dividing the resultant by 2.

Net income
Return on equity =
Average shareholder's equity
$16,100
232,300
= 6.9%
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Net income Return on equity = Average shareholder's equity $16,100 232,300 = 6.9%

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Step 2

Hence, the dividend yield is 1.5 %. It is obtained by the division of annual dividend per share and stock price. Per-share annual dividend is obtained by dividing the annual dividend by share outstanding.

Annual dividend per share
Dividend yield
Stock price
$0.09
5.90
=1.5%
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Annual dividend per share Dividend yield Stock price $0.09 5.90 =1.5%

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Step 3

Hence, the earning per share is 0.36. It is obtained by the division of net...

Net income- Preference dividend
Earning per share
Total outstanding shares
$16,100-$0
45000
=0.36
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Net income- Preference dividend Earning per share Total outstanding shares $16,100-$0 45000 =0.36

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