The issued share capital of Soresson plc consists of 1,000,000 ordinary shares of 50p each and 250,000

Question:

The issued share capital of Soresson plc consists of 1,000,000 ordinary shares of 50p each and 250,000 6% preference shares of £1 each.

In the year to 31 March 2018, the company's profit after tax was £90,000. Dividends paid during the year comprised the preference dividend for the year and an ordinary dividend of £55,000. The market price of the company's ordinary shares on 31 March 2018 was 70p per share.

Required:

Calculate the following ratios for Soresson plc:

(a) Earnings per share.

(b) Dividend cover.

(d) Price earnings ratio.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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