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Makers Corp. had additions to retained earnings for the year just ended of $248,000. The firm paid out $187,000 in cash dividends, and it has ending total equity of $4.92 million. The company currently has 150,000 shares of common stock outstanding. a. What are earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If the stock currently sells for $80 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) e. What is the price-earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) f. If the company had sales of $4.74 million, what is the price-sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

1 Answer

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Answer:

(a.) Earning per share =
(Retained earning + dividend paid out )/(common stock)

Earning per share =
(248000 + 187000 )/(150000)

Earning per share = $2.90 per share

(b.) Dividend per share =
(Dividend paid out )/(common stock)

Dividend per share =
(187000)/(150000)

Dividend per share = $ 1.25 per share

(c.) Book value per share =
(Book value of equity )/(common stock)

Book value per share =
(4920000 )/(150000)

Book value per share = $32.80 per share

(d.) Market to book ratio =
(Market price per share )/(Book value per share)

Market to book ratio =
(80)/(32.80)

Market to book ratio = $2.44 per share

(e.) Price - earning ratio =
(Market price per share )/(Earning per share)

Price - earning ratio =
(80)/(2.90) = 27.59 times

(f.) Price sales ratio =
(Market price per share )/(sales per share)

Price sales ratio =
(80)/((4740000)/(150000) ) =
(80)/(31.60) = 2.53 times

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