EPS, P/E Ratio, and Dividend Ratios The Stockholders’ Equity section of the balance sheet for Cooperstown Corp. at the end of 2010 appears as follows:

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

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, 2010, 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?AppendixLO1