12.8 You are presented with the following information relating to Hedge public limited company for the year to 31 May 2005:

(a) The company has an issued and fully paid share capital of £500 000 ordinary shares of £1 each. There are no preference shares.

(b) The market price of the shares at 31 May 2005 was £3.50.

(c) The net profit after taxation for the year to 31 May 2005 was £70 000.

(d) The directors are proposing a dividend of 7p per share for the year to 31 May 2005.

Required:

Calculate the following accounting ratios:

1 dividend yield;

2 dividend cover;

3 earnings per share; and 4 price/earnings ratio.