Question
From the following data determine for the current year the a rate earned on total assets, b. Rate earned on stockholders' equity, c. Rate earned
From the following data determine for the current year the a rate earned on total assets, b. Rate earned on stockholders' equity, c. Rate earned on common stockholders' equity, d. Earnings per share on common stock, e. Price-earnings ratio on common stock and f dividend yield on common stock. Assume that the current market price per share of common stock is $25. Present key figures used in your computations. -----------------------------------
Current Preceding
current year preceding year current assets --------------------------- 745,000 ------------ 820,000
Property, plant, and equipment----------- 1,510,000--------- 1,400,000
Current liabilities (non interest bearing)---------------------- 160,000------------ 140,000
Long-term liabilities 12%------------------------ 400,000 ----------- 400,000
Preferred 10% stock---------------------- 250,000----------- 250,000
Common stock, $25 par----------------- 1,200,000---------- 1,200,000
Retained earnings:
Beginning of year------------------------ 240,000---------- 160,000
Net inome for year----------------------- 95,000---------- 155,000
Preferred dividends declared----------- (25,000)---------- (25,000)
Common dividends declared----------- (70,000)--------- (60,000)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started