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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Ratio Analysis

Consider the following information.

Chapter 10, Problem 78E, Ratio Analysis Consider the following information. Required: Calculate the stockholder payout

Required:

  1. Calculate the stockholder payout ratios. (Note: Round answers to two decimal places.)
  2. Calculate the stockholder profitability ratios. (Note: Round answers to two decimal places.)

To determine

(a)

Introduction:

Analyzing the financial statements allows the stockholders to assess payout. There are four payout ratios i.e. Dividend Yield, Dividend Payout, Stock repurchase Payout and total payout.

To calculate:

Stockholder payout ratios.

Explanation

Given:

Following information has been given:

Particulars $ Particulars $
Stock Price $55/share Avg. common shares outstanding 850,000
Common Dividends $765,000 Dividends per common share $0.90/share
Preferred Dividends $238,800 Net Income $15,485,000
2019 preferred stock $6,162,000 2018 preferred stock $5,299,000
2019 total stockholders’ equity $28,435,000 2018 total stockholders’ equity $25,483,000
Purchases of treasury stock $120,000
  1. Dividend Yield = Dividend per common shareCommon Stock Price
  2. Dividend Yield = $0.90$55

    Dividend Yield = 0

To determine

(b)

Introduction:

Analyzing the financial statements helps the stockholders access the profitability of the firm. There are mainly 2 Stockholder profitability ratios i.e. Return on common equity and earnings per share.

To calculate:

Stockholder profitability ratios.

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