1. EPS, P/E Ratio, and Dividend Ratios

   The Stockholders' Equity section of the balance sheet for Balla Enterprises at the end of 2017 appears as follows:

   8%, $100 par, cumulative preferred stock, 200,000 shares authorized, 50,000 shares issued and outstanding		$5,000,000
   Additional paid-in capital on preferred		2,500,000
   Common stock, $5 par, 500,000 shares authorized, 400,000 shares issued and outstanding		2,000,000
   Additional paid-in capital on common		18,000,000
   Retained earnings		37,500,000
   	Total stockholders' equity	$65,000,000

   Net income for the year was $1,380,000. Dividends were declared and paid on the preferred shares during the year, and a quarterly dividend of $0.50 per share was declared and paid each quarter on the common shares. The closing market price for the common shares on December 31, 2017, was $27.45 per share.

   Required:

   1. Compute the following ratios for the common stock:

   When required, round earnings per share and price/earnings ratio answers to two decimal places. For dividend payout and dividend yield ratios, round raw calculations to 4 decimal places, but enter each answer as a percentage to two decimal places; for example, .17856 rounds to .1786 and would be entered as 17.86, indicating 17.86%.

   a. Earnings per share	$fill in the blank 1
   b. Price/earnings ratio	fill in the blank 2	to 1
   c. Dividend payout ratio	fill in the blank 3	%
   d. Dividend yield ratio	fill in the blank 4	%

   2. Before recommending the stock of Balla to a client, as a financial adviser, you would like to know:

   1. future earnings growth.
   2. risk of the stock.
   3. general economic trends and how they affect the company.
   4. all of these.

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