Question

Tallow​, Inc. had reported the following​ balances: LOADING...​(Click the icon to view the 2018 and 2019 ​balances.) 11. Compute Tallow​'s earnings per share for 2019. 12. Compute Tallow​'s ​price/earnings ratio for 2019​, assuming the market price is $ 35 per share. 13. Compute Tallow​'s rate of return on common​ stockholders' equity for 2019. 11. Compute Tallow​'s earnings per share for 2019.

Answer 1

Step-by-step explanation:

Rate of return on common stockholder's equity for 2019:

= (Net Income - Preferred Dividend) / Av. common stockholder's equity

= ($94,000 - $26,000) / $312,000

= $68,000 / $312,000

= 0.2179 or 21.79%

Av. common stockholder's equity 2019 :

Total stockholder's equity 2018 ( Common) = Total stockholder's equity - Stockholder's Equity attributable to preferred

= $318,000 - $22,000

= $296,000

Total stockholder's equity 2019 ( Common) = Total stockholder's equity - Stockholder's Equity attributable to preferred

= $350,000 - $22,000

= $328,000

Av. common stockholder's equity 2019 = ($296,000 + $328,000) / 2 = $312,000