EPS, P/E Ratio, and Dividend Ratios The stockholders’ equity section of the balance sheet for Cooperstown Corp. at the end of 2008 appears as follows:

Net income for the year was $1,300,000. Dividends were declared and paid on the preferred shares during the year, and a quarterly dividend of $0.40 per share was declared and paid each quarter on the common shares. The closing market price for the common shares on December 31, 2008, was $24.75 per share.
Required 1. Compute the following ratios for the common stock:

a. Earnings per share

b. Price/earnings ratio

c. Dividend payout ratio

d. Dividend yield ratio 2. Assume that you are an investment adviser. What other information would you want to have before advising a client regarding the purchase of Cooperstown stock?

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8%, $100 par, cumulative preferred stock, 200,000 shares authorized, 50,000 shares issued and outstanding Additional paid-in capital on preferred Common stock, $5 par, 500,000 shares authorized, 400,000 shares issued and outstanding Additional paid-in capital on common Retained earnings Total stockholders' equity $ 5,000,000 2,500,000 2,000,000 18,000,000 37,500,000 $65,000,000