Question

Makers Corp. had additions to retained earnings for the year just ended of $298,000. The firm paid out $178,000 in cash dividends, and it has ending total equity of $4.83 million. The company currently has 140,000 shares of common stock outstanding.

What are earnings per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)



Earnings $ per share


What are dividends per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)


Dividends $ per share


What is the book value per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)


Book value $ per share


If the stock currently sells for $70 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)



Market-to-book ratio times


What is the price-earnings ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16.)



Price-earnings ratio times


If the company had sales of $4.27 million, what is the price-sales ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)



Price-sales ratio times

Answer 1

Makers Corp.

a. Earnings per share = $3.40

b. Dividends per share = $1,27

c. Book value per share = $34.50

d. Market to book ratio times = 2.03 times

e. Price-earnings ratio times = 20.59 times

f. Price-Sales ratio times = 2.30 times

Step-by-step explanation:

a) Retained Earnings = $298,000

Cash Dividends paid = $178,000

Total earnings = $ 476,000 ($298,000 + $178,000)

Ending total equity = $4.83 million

Outstanding common stock = 140,000 shares

Earnings per share = $476,000/140,000 = $3.40 per share

Dividends per share = $178,000/140,000 = $1.27 per share

Book value per share = $4.83 million/140,000 = $34.50

Market-to-book ratio = $70/$34.50 = 2.03 : 1

Price-earnings ratio = $70/$3.40 = 20.59 : 1

Sales per share = $4.27 million /140,000 shares = $30.50

Price-sales ratio = $70/$30.50 = 2.30 : 1