Ostuni Limited is a Niagara-on- the-Lake, Ontariobased winery producing blended, premium, and ultra-premium wines, which are sold
Question:
Ostuni Limited is a Niagara-on- the-Lake, Ontario–based winery producing blended, premium, and ultra-premium wines, which are sold globally. The company has a strong distribution network in Canada through independent retail locations. The following information has been extracted from the company’s annual report.
Required
a. Calculate Ostuni’s price/earnings ratio from 2022 through 2024. Comment on whether the ratio’s trend over this period reflects a company with higher growth potential or one that has achieved maturity.
b. Calculate Ostuni’s dividend payout ratio and dividend yield for 2022 through 2024. What do the results of these ratios tell us about Ostuni Ltd.?
c. Calculate Ostuni’s return on equity ratio for 2023 and 2024. Note that Ostuni’s articles of incorporation authorize only common shares. Comment on how effectively Ostuni’s management has been able to use the equity of its shareholders to generate returns.
Transcribed Image Text:
Market price per share
Earnings per share
Dividends per share
Net income (in thousands)
Shareholders' equity (in thousands)
2024
$11.80
$ 0.64
$ 0.163
$ 21,363
$177,317
2023
$ 6.83
$
0.46
$ 0.150
$ 15,590
$157,736
2022
$ 5.07
$ 0.36
$ 0.140
$ 12,198
$147,375
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a Priceearnings ratio market price per shareearnings per share 2022 507036 141 2023 683046 148 2024 ...View the full answer
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The dividend yield or dividend–price ratio of a share is the dividend per share, divided by the price per share. It is also a company\\\'s total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage.
