During 2018 Finch Corporation reported aftertax net income o

During 2018, Finch Corporation reported after-tax net income of $3,615,000. During the year, the number of shares of stock outstanding remained constant at 9,660 of $100 par, 10 percent preferred stock and 400,000 shares of common stock. The company\'s total stockholders\' equity is $20,000,000 at December 31, 2018. Finch Corporation\'s common stock was selling at $51 per share at the end of its fiscal year. All dividends for the year have been paid, including $5.00 per share to common stockholders. Required a. Compute the earnings per share. (Round your answer to 2 decimal places.) b. Compute the book value per share of common stock. (Round your answer to 2 decimal places.) c. Compute the price-earnings ratio. (Round intermediate calculations and final answer to 2 decimal places.) d. Compute the dividend yield. (Round your answer to 2 decimal places. (i.e., .2345 should be entered as 23.45.) a. Earnings per share b. Book value per share c. Price-earnings ratio d. Dividend yield times

Solution

after tax net income

3615000

less preferred dividend

(9660*100)*10%

96600

net income available to common stockholders

3518400

no of common stock

400000

earning per share

3518400/40000

8.80

Book value per share of common stock

total stockholder equity

20000000

less book value of preferred stock

966000

book value of common stock

19034000

no of common stock

400000

Book value per share of common stock

47.59

Price earning ratio = market price/eps

51/8.796

5.80

dividend yield = dividend paid/current market price

5/51

9.80%

after tax net income		3615000
less preferred dividend	(9660*100)*10%	96600
net income available to common stockholders		3518400
no of common stock		400000
earning per share	3518400/40000	8.80
Book value per share of common stock
total stockholder equity		20000000
less book value of preferred stock		966000
book value of common stock		19034000
no of common stock		400000
Book value per share of common stock		47.59
Price earning ratio = market price/eps	51/8.796	5.80
dividend yield = dividend paid/current market price	5/51	9.80%