The following information has been gathered for MaletteManufacturing:
Net income $5,000,000 Interest expense 400,000 Average total assets 60,000,000 Preferred dividends 400,000 Common dividends $1,200,000 Average common shares outstanding 800,000 shares Average common stockholders' equity $20,000,000 Market price per common share $40
Assume that the firm has no common stock equivalents. The taxrate is 34%.
Required:
1. Compute the return on assets. Round youranswer to three decimal places.
2. Compute the return on common stockholders'equity. Round your answer to two decimal places.
3. Compute the earnings per share. Round youranswer to two decimal places.
$ per share
4. Compute the price-earnings ratio. Round youranswer to two decimal places.
5. Compute the dividend yield. Round youranswer to four decimal places.
6. Compute the dividend payout ratio. Roundyour answer to two decimal places.
The following information has been gathered for MaletteManufacturing:
| Net income | $5,000,000 |
| Interest expense | 400,000 |
| Average total assets | 60,000,000 |
| Preferred dividends | 400,000 |
| Common dividends | $1,200,000 |
| Average common shares outstanding | 800,000 shares |
| Average common stockholders' equity | $20,000,000 |
| Market price per common share | $40 |
Assume that the firm has no common stock equivalents. The taxrate is 34%.
Required:
1. Compute the return on assets. Round youranswer to three decimal places.
2. Compute the return on common stockholders'equity. Round your answer to two decimal places.
3. Compute the earnings per share. Round youranswer to two decimal places.
$ per share
4. Compute the price-earnings ratio. Round youranswer to two decimal places.
5. Compute the dividend yield. Round youranswer to four decimal places.
6. Compute the dividend payout ratio. Roundyour answer to two decimal places.
Related questions
Lundberg Corporation's most recent balance sheet and incomestatement appear below:
| Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) | ||||
| Year 2 | Year 1 | |||
| Asset: | ||||
| Current assets: | ||||
| Cash | $ | 160 | $ | 170 |
| Accounts receivable | 270 | 280 | ||
| Inventory | 170 | 160 | ||
| Prepaid expenses | 25 | 25 | ||
| Total current assets | 625 | 635 | ||
| Plant and equipment, net | 954 | 934 | ||
| Total assets | $ | 1,579 | $ | 1,569 |
| Liabilities and stockholders' equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 220 | $ | 210 |
| Accrued liabilities | 110 | 110 | ||
| Notes payable, short term | 160 | 170 | ||
| Total current liabilities | 490 | 490 | ||
| Bonds payable | 250 | 300 | ||
| Total liabilities | 740 | 790 | ||
| Stockholders' equity: | ||||
| Preferred stock, $100 par value, 10% | 260 | 260 | ||
| Common stock, $1 par value | 100 | 100 | ||
| Additional paid-in capital--common stock | 110 | 110 | ||
| Retained earnings | 369 | 295 | ||
| Total stockholders' equity | 839 | 765 | ||
| Total liabilities and stockholders' equity | $ | 1,579 | $ | 1,555 |
| Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) | |||
| Sales (all on account) | $ | 1,480 | |
| Costof goods sold | 868 | ||
| Gross margin | 612 | ||
| Selling and administrative expenses | 334 | ||
| Netoperating income | 278 | ||
| Interest expense | 49 | ||
| Netincome before taxes | 229 | ||
| Income taxes (30%) | 69 | ||
| Netincome | $ | 160 | |
| Dividends on common stock during Year 2 totaled $60 thousand.The market price of common stock at the end of Year 2 was $9.32 pershare.
|
