Question
For 2015, Willis Corporation reported after-tax net income of $550,000. During the year, the number of outstanding shares of 6% $100 par preferred stock remained
For 2015, Willis Corporation reported after-tax net income of $550,000. During the year, the number of outstanding shares of 6% $100 par preferred stock remained constant at 3,000, and 200,000 shares of common stock were outstanding all year. The company's total stockholders' equity at December 31, 2015, was $6,500,000. Willis's common stock was selling at $28 per share at the end of the year. All dividends for the year were paid, including a dividend of $1.50 per share to common stockholders. Round your percentage to two decimal places. (e.g., .1562 as 15.62%)
**i don't need this to be written for me, i just need a few short answers to the following to get me going:
- Justify whether or not you would invest in this company.
- Incorporate the computations you performed to rationalize your decision.
Below are my calculations:
- Earnings per share 550,000-18000/200000=$2.66
- Book value per share of common stock 6500000-200000/200000=$31.5
- Price-earnings ratio 28/2.66=$10.53
- Dividend yield 1.50/28=5.36
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