Question

Makers Corp. had additions to retained earnings for the year just ended of $301.000. The firm paid out $179,000 in cash dividends, and it has ending total equity of $4.84 million. The company currently has 150,000 shares of common stock outstanding. a. What are earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If the stock currently sells for $72 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16.) e. What is the price.earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) f. If the company had sales of $4.98 million, what is the price-sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) * Answer is complete but not entirely correct. $ $ $ Earnings per share Dividends per share Book value per share Market-to-book ratio Price-earnings ratio Price-sales ratio 2.01 1.19 32.37 2.23 23.92 2.17 d. times times times

Answer 1

Note : Solving only answers which are incorrect ie a & e

Answer a. Earning per share = $ 3.20.

Explanation:

Net income = Addition to retained earnings + Cash dividends

= $301,000 + $179,000

= $480,000

Earning per share = Net income / Common stock outstanding.

= $480,000 / 150,000 shares =  $ 3.20.

Answer e. Price - earning ratio = $22.50.

Explanation :

Price - earning ratio = Market price per share / Earning per share

= $72 / $3.20 = $22.50.