Respuesta :
Answer:
a.The company's Earnings Per Share (EPS) is $3.73.
[tex]EPS = \frac{Net Income}{Total shares outstanding}[/tex]
Since
[tex]Net Income = Dividends paid in current year + Additions to Retained Earnings[/tex],
we can re-write the EPS formula as:
[tex]EPS = \frac{Dividends paid in current year + Additions to Retained Earnings}{Number of shares outstanding}[/tex]
So,
[tex]EPS = \frac{415,000+220,000}{170000}[/tex]
EPS = $3.735294118
b. Dividends Per Share (DPS) are $1.29.
[tex]DPS = \frac{Total Dividends paid}{No. of outstanding shares}[/tex]
[tex]DPS = \frac{220000}{170000} = 1.294117647 [/tex]
c. Book Value per share is $32.94
[tex]Book Value per share = \frac{Total Ending Equity}{Number of outstanding shares}[/tex]
[tex]Book Value per share = \frac{5600000}{170000}[/tex]
Book Value per share = $32.94117647
d. The company's market-to-book ratio is 1.97.
[tex]Market-to-Book ratio = \frac{Market Price per share}{Book Value per share}[/tex]
[tex]Market-to-Book ratio = \frac{65}{32.94117647}[/tex]
Market-to-book ratio = 1.973214286
e. Price Earnings (P/E) Ratio is 17.40.
[tex]P/E =\frac{Market Price per share}{EPS}[/tex]
[tex]P/E = \frac{65}{3.735294118}[/tex]
P/E = 17.4015748
f. Price Sales Ratio is 1.48.
[tex]Price Sales Ratio = \frac{(Market Price per share * No. of shares outstanding)}{Sales}[/tex]
The numerator in the formula above is also known as market capitalization.
[tex]Price Sales Ratio = \frac{(65 * 170000}{745000}[/tex]
Price Sales Ratio = 1.483221477
a. The earning per share is $ 3.74
b. The dividend per share is $ 1.29
c. The book value per share is $ 32.94
d. The market to book ratio is 1.97
e. The price-earnings ratio is 17.40
f. The price-sales ratio is 1.48
Further Explanation:
a. Earnings per share: It refers to the amount of the company’s profit allocated among the outstanding shares.
Calculate the earnings per share:
EPS = Net Income ÷ Total no. of outstanding shares
= $635,000 ÷ 170,000
= $3.74
Working note:
Calculate the net income:
Net Income = $415,000 + $220,000
= $635,000
b. Dividend per share: It refers to the dividend declared by the company for each outstanding share.
DPS = Total dividend paid ÷ Total no. of outstanding shares
= $220,000 ÷ 170,000
= $1.29
c. Book value per share: It is calculated by dividing the equity available to shareholders with total no. of outstanding shares.
Book value per share = Total ending equity ÷ Total no. of outstanding shares
= $560,000 ÷ 170,000
=$32.94
d. Market to book ratio: It is used to evaluate the market price of the share with its book value.
Market to book ratio = Market price per share ÷ Book value per shares
= $65÷ $32.94
= 1.97
e. Price-earnings ratio: It is used to measures the market price of the share relative to its book value.
P/E ratio = Market price per share ÷ Earnings per shares
= $65 ÷ $3.74
= 17.4
f. Price sales ratio: It uses the market capitalization to evaluate whether the shares are properly valued.
Price sales ratio = (Market price × no. of outstanding shares) ÷ Sales
= ($65 × 170,000) ÷ 745,000
= 1.48
Learn more:
1. Learn more about Federal Reserve Bank
https://brainly.com/question/9417688
2. Learn more about Net Income
https://brainly.com/question/10955397
3. Learn more about Share price
https://brainly.com/question/4503027
Answer details:
Grade: High School
Subject: Accounting
Chapter: Financial Statement Analysis
Keywords: Makers corp, additions, to retained, earnings, for, the, year, just ended of $415,000. The firm, paid out $220,000 in cash dividends, and, it has, ending, total equity, of $5.6 million. The company, currently, has, 170,000, shares, of, common, stock, outstanding, What are earnings per share, What are, dividends, per, share, What is the book value, per, share, If the stock currently, sells, for $65 per share, what is the market-to-book ratio, What, is, the price-earnings, If the company, had sales, of $7.45 million, what, is, the price-sales ratio.
