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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Earnings per share, price-earnings ratio, dividend yield

The following information was taken from the financial statements, of Monarch Resources? Inc. for December 31 of the current yean


The net income was $1,300,000. and the declared dividends on the common stock were $460,000 for the current year. The market price of the common stock is $92 per share.
For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield.

To determine

Concept Introduction:

Earnings per share: It means that company's profit on a single share. This is calculated by division of earnings available for equity share from number of equity shares.

Price earnings ratio: It means that an investor is the amount invested into business to earn a single dollar. It calculates that how much an investor is able to pay per dollar of earnings.

Dividend per share: It tells us about the amount of dividend received per share. To calculate dividend per share is equal to the annual dividend/ purchase price.

Dividend Yield: Dividend expressed as a percentage of a current share price.

To Calculate:

Earnings per share, Price earnings ratio, dividend per share and dividend yield.

Explanation
    ParticularsCompany 1
    Net Income (A)1300000
    Common Shares (B)100000
    EPS (A/B)=C13
    Share mark...

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