Question
Minnesota Manufacturing's balance sheet showed total equity of $3,000,000 and 800,000 shares of common stock outstanding on 12/31/2019. During 2020, the firm had $800,000 of
Minnesota Manufacturing's balance sheet showed total equity of $3,000,000 and 800,000 shares of common stock outstanding on 12/31/2019. During 2020, the firm had $800,000 of net income, and it paid out $150,000 in dividends.
What was the book value per share on 12/31/2020, assuming no new common stock was issued during 2020?
Remember that
Total equity = Paid-in capital + Retained earnings
Therefore
Total equity2020 =
Total equity2019 + Addition to Paid-in capital + Addition to Retained earnings
How much is the Earnings per share (EPS) for 2020?
How much is the Dividends per share (DPS) for 2020?
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