We are comparing two companies that are listed on the ASX and which have the following details Bells Ltd Profit after tax of $50 million for the last financial period Pays $4 million in preference share dividends (the preference shares are classed as equity) Had 20 million ordinary shares on issue ...

a b On the basis of the information presented we can see that the EPS of Bells Ltd is about 13 times the EPS of Southside Ltd While this notionally means that each ordinary share in Bells has a larger ...

We are comparing two companies that are listed on the ASX and which have the following details:

Question:

We are comparing two companies that are listed on the ASX and which have the following details:

Bells Ltd
Profit after tax of $50 million for the last financial period.
Pays $4 million in preference share dividends (the preference shares are classed as equity).
Had 20 million ordinary shares on issue for the first nine months of the year, and 25 million ordinary shares on issue for the last three months of the year.
The dividend paid for the year on its ordinary shares is $1.00 per share.
The latest share price was $16.

Southside Ltd

Profit after tax of $100 million for the last financial period.
Pays $8 million in preference share dividends (the preference shares are classed as debt).
Had 60 million shares on issue for the full year.
The dividend paid for the year on ordinary shares is $0.95 per share.
The latest share price was $49.

REQUIRED

a. Calculate basic EPS, price earnings ratio and dividend payout ratio for each of the companies.

b. Compare the calculations made for each company

Fantastic news! We've Found the answer you've been seeking!