The following information was taken from the financial statements of Bailey Inc. for December 31 of the

Question:

The following information was taken from the financial statements of Bailey Inc. for December 31 of the current fiscal year:

Common stock, $10 par value (no change during the year) ...$4,000,000

Preferred $5 stock, $25 par (no change during the year) ......1,250,000

The net income was $1,250,000 and the declared dividends on the common stock were $800,000 for the current year. The market price of the common stock is $40 per share. For the common stock, determine

(a) The earnings per share,

(b) The price-earnings ratio,

(d) The dividend yield. Round to one decimal place except earnings per share, which should be rounded to two decimal places.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...