RATIO ANALYSIS Consider the following information taken from the stockholders’ equity section:

(dollar amount in thousands)

2010 2009 Preferred stock $ 1,000 $ 1,000 Common stock, 334,328,193 and 330,961,869 shares issued in 2010 and 2009, respectively 3,343 3,310 Paid-in capital in excess of par 766,382 596,239 Retained earnings 5,460,629 4,630,390 Accumulated other comprehensive

(loss) income (206,662) 58,653 Treasury stock (76,275,837 and 56,960,213 shares in 2010 and 2009, respectively) at cost (3,267,955) (2,205,987)

Total stockholders’ equity $ 2,756,737 $ 3,083,605 Additional Information (all numbers in thousands other than per share information):
Weighted average common shares outstanding 264,453 Price per share $ 70.47 Net income 1,123,153 Preferred dividends 80,000 Common dividends 212,914 Common dividends per share 0.81 Stock repurchases 1,061,968 Required:
. Calculate the following:
Stockholder Payout Stockholder Profitability Dividend yield Return on common equity Dividend payout EPS Total payout Stock repurchase payout . Assume last year’s ratios were:
Stockholder Payout Stockholder Profitability Dividend yield: 1.05% Return on common equity: 34.26%
Dividend payout: 15.80% EPS: $3.51 Total payout: 75.00%
Stock repurchase payout: 59.20%
and the current year industry averages are:
Stockholder Payout Stockholder Profitability Dividend yield: 0.76%% Return on common equity: 23.81%
Dividend payout: 42.35% EPS: $1.23 Total payout: 88.37%%
Stock repurchase payout: 46.02%
How do you interpret the company’s payout and profitability performance?
Problem Set B