Dover River Company has current operating profit of $200,000 before taxes. Interest expense is $10,000, dividends paid on preferred shares were $18,750, and common dividends paid of $30,000. The company paid taxes of $61,250. The company has 20,000 outstanding common shares.
a. Calculate the EPS and common dividends per share.
b. Calculate the payout ratio.
c. Determine the increase in retained earnings for the year.
d. If the share price is $26.40, calculate the price-earnings (P/E) ratio.