Question

The financial statements of Friendly Fashions include the following selected data (in millions): ($ in millions except share data) 2021 2020 Sales $ 9,343 $ 10,434 Net income $ 230 $ 748 Stockholders' equity $ 1,760 $ 2,240 Average Shares outstanding (in millions) 640 - Dividends per share $ 0.33 - Stock price $ 8.10 - Required: Calculate the following ratios for Friendly Fashions in 2021. (Enter your Dividend yield and Price-earning ratio values to 2 decimal places. Enter your answers in millions (i.e. 5,500,000 should be entered as 5.5).)​

Answer 1

Step-by-step explanation:

The financial statements of Friendly Fashions include the following selected data (in millions): ($ in millions except share data)

2021

Sales $ 9,343

Net income $ 230

Stockholders' equity $ 1,760

2020

Sales $ 10,434

Net income $ 748

Stockholders' equity $ 2,240

both:

Average Shares outstanding (in millions) 640

Dividends per share $ 0.33

Stock price $ 8.10

Required: Calculate the following ratios for Friendly Fashions in 2021. (Enter your Dividend yield and Price-earning ratio values to 2 decimal places. Enter your answers in millions (i.e. 5,500,000 should be entered as 5.5).)​

Dividend yield for 2021:

= Dividends per share / share price

= 0.33 / 8.10

= 2.72%

P/E ratio for 2021:

= share price / EPS

= 8.10 / (230/640)

= 22.54 mill