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RST Company is a public firm that has income of $5.00 million and 1,000,000 shares of common shares. In addition, RST Company has 100,000, $100

RST Company is a public firm that has income of $5.00 million and 1,000,000 shares of common shares. In addition, RST Company has 100,000, $100 par shares with a preferred dividend rate of 8%. RST Company

decided to pay out 60% of its earnings to its

shareholders. RST is selling at $63.00 a share.

1. How much will the preferred shareholders receive?

2. How much will the common shareholders receive?

3. What is the Earnings per Share for the RST

Company?

4. What is the Price Earnings Ratio for the RST Company?

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