The following financial information (in millions except for per share amounts) is for two major corporations for the three fiscal years ended December 31 as follows:

Neither company has preferred shares issued.

Instructions

a. Calculate earnings per share and the price-earnings and dividend payout ratios for each company for 2017, 2016, and 2015. Comment on whether their ratios have improved or deteriorated.

b. Compare Canadian Pacific?s ratios with Canadian National?s.

Taking It Further

Why is the presentation of fully diluted earnings per share required under IFRS, given that it is a hypothetical number?

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Canadian Pacific Railway Limited Weighted average number of common shares Profit Dividends Market price per share (December 31) Canadian National Railway Company Weighted average number of common shares Profit Dividends Market price per share (December 31) 2017 2016 149.6 2015 145.9 159.7 $ 1,352 $ 2,405 $ 319 $ 1,599 $ 274 $191.56 2$ $176.73 221 $229.66 2017 753.6 2016 2015 800.7 $3,538 $ 996 776.0 $ 5,484 $3,640 $ 1,239 $103.65 $1,159 $90.36 $77.35