While eating his Kelloggs Frosted Flakes one January morning, Tony noticed the following article in his local paper:

Kellogg Announces Strong 2010 Performance Battle Creek, Mich., Feb. 3, 2011

(GLOBE NEWSWIRE)Kellogg Company (NYSE:K) today announced its full-year 2010 reported earnings of $1.2 billion, or $3.30 per diluted share, an increase of 4 percent from full-year 2009 reported earnings of $3.16 per diluted share. As a shareholder, Tony is well aware that Kellogg pays a regular cash dividend of $0.43 per share quarterly. A quick click on a price quote service indicated that Kelloggs shares closed at $51.08 on December 31.

1. Using the numbers provided, determine the price/earnings ratio for Kellogg Company for 2010. What information does this ratio impart?

2. What is the dividend payout ratio for Kellogg? What does it indicate?