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

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.)

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

Answer 1

Earning per share= $2.12 per share

Dividend per share= $1.27 per share

Book value per share= $34.28 per share

Market to book ratio = $2.04 per share

Price earning ratio = $2.33

Step-by-step explanation:

As we know that: earning per share =( net income - preference dividend)/ weighted number of outstanding shares

= (298000 - 0 ) / 140000

= $2.12 per share.

As we know that: dividend per share = Total dividend paid / Share outstanding

= 178000/140000

= $1.27 per share.

As we know that Book value per share = Shareholders equity / average number of common shares.

= 4800000/140000 = $34.28 per share.

As we know that market to book ratio = Market price per share / Book value per share.

= 70 / 34.28 = $ 2.04 per share.

As we know that Price earning ratio

= Market value per share / Earning per share

= 70/ 2.12 = $ 33.01 per share.

As we know that Price sales ratio = Market value per share / sales per share.

Sales per share = Sales / outstanding shares = 4200000/140000= $30 per share.

Price sales ratio= 70/30 =$ 2.33