Question

Papa Roach Exterminators, Inc., has sales of $659,000, costs of $345,000, depreciation expense of $45,000, interest expense of $22,000, and a tax rate of 40 percent. The firm paid out $109,000 in cash dividends, and has 30,000 shares of common stock outstanding.

a. What is the earnings per share, or EPS, figure?
b. What is the dividends per share figure?

Answer 1

a. What is the earnings per share, or EPS, figure?

$4.94 / share

b. What is the dividends per share figure?

$3.63 / share

Step-by-step explanation:

Sales = $659,000

Costs = ($345,000)

Gross Income = $314,000

Depreciation expense = ($45,000)

Operating Income = $269,000

Interest expense = ($22,000)

Profit before tax = $247,000

Tax 40% = ($98,800)

Net Income = $148,200

Dividend = $109,000

Common stock outstanding = 30,000 shares

a.

Earning per share = $148,200 / 30,000 = $4.94 / share

b.

Dividend per share = $109,000 / 30,000 = $3.63 / share