Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that Castile Products, Inc., paid dividends of $3.75 per share during the year. Also assume that the companys common stock had a market price

image text in transcribed

Assume that Castile Products, Inc., paid dividends of $3.75 per share during the year. Also assume that the companys common stock had a market price of $63 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

image text in transcribed

The financial statements for Castile Products, Inc., are given below. Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 21,000 Accounts receivable, net 190,000 Merchandise inventory 390,000 Prepaid expenses 9,000 Total current assets 610,000 Property and equipment, net 840,000 Total assets $1,450,000 $ 270,000 370,000 640,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 9% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity Total liabilities and equity $ 140,000 670,000 810,000 $1,450,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $2,140,000 Cost of goods sold 1,240,000 Gross margin 900,000 Selling and administrative expenses 600,000 Net operating income 300,000 Interest expense 33,300 Net income before taxes Income taxes (30%) 266,700 80,010 Net income $ 186,690 Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $280,000. All sales were on account. 1. Earnings per share. (Round your answer to 2 decimal places.) Earnings per share 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) Dividend payout ratio % 3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) Dividend yield ratio % 4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) Price-earnings ratio 5. Book value per share. (Round your answer to 2 decimal places.) Book value per share

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Advanced Accounting In Canada

Authors: Hilton Murray, Herauf Darrell

7th Edition

1259066487, 978-1259066481

Students also viewed these Accounting questions