HomeworkLib
Question

In 2011 ABC Company earned $15 per share and paid out dividends of $3 per share....

In 2011 ABC Company earned $15 per share and paid out dividends of $3 per share. Its stock price at the end of 2011 was $60. What was ABC’s payout ratio and price to earnings ratio?
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Dividend per share = $3

Earnings per share = $15

Stock price = $60

Part a:

Payout Ratio = Dividend per share / Earnings per share

= $3 / $15

= 0.20

= 20%

Therefore, payout Ratio is 20%

Part b:

Price to earnings ratio = Share price / Earnings per share

= $60 / $15

= 0.25

Therefore, Price to Earnings ratio is 0.25

0 0
Add a comment
Know the answer?
Add Answer to:
In 2011 ABC Company earned $15 per share and paid out dividends of $3 per share....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • XYZ Company earned $2.40 per share last year. If they paid out $0.91 per share in...

    XYZ Company earned $2.40 per share last year. If they paid out $0.91 per share in dividends and had an ROE of 12.6%, what is the sustainable growth rate? Gamble Corp has a sustainable growth rate of 5.6%, an ROE of 13.4% and dividends per share of $1.82. If the price to earnings ratio is 12, what is the price of the stock?

  • 7. A company earned $30.00 per share and paid out $16.00 in dividends to shareholders. The...

    7. A company earned $30.00 per share and paid out $16.00 in dividends to shareholders. The company's expected return on equity is 17.0%. The company expects to maintain the same dividend payout ratio. A. Calculate the future growth rate of earnings (X.X%). (9 points) Given a Required Rate of Return of 14.0 % , Calculate the Stock Price ($X.XX): (9 points) B. If the company's stock is currently trading at $300, would you invest in it? (3 points) C. 8...

  • An Internet company earned $7.20 per share and paid dividends of $5.60 per share. The company...

    An Internet company earned $7.20 per share and paid dividends of $5.60 per share. The company reported a dividend yield of 5 percent. What was the price of the stock? Price of the stock

  • Solar power Systems earned $20 per share at the beginning of the year and paid out...

    Solar power Systems earned $20 per share at the beginning of the year and paid out $10 in dividends to shareholders (so, D0=$10) and retained $10 to invest in new projects with an expected return on equity of 19 percent. In the future, Solarpower expects to retain the same dividend payout ratio, expects to earn return of 19 percent on its equity invested in its new projects, and will not be changing the number of shares of common stock outstanding....

  • Question 31 Wakon company earned $3.25 per share and paid dividends of $0.75 per share. The...

    Question 31 Wakon company earned $3.25 per share and paid dividends of $0.75 per share. The company reported a dividend yield of 3 percent. What was the price of Wakon’s stock? (Round your answer 2 decimal places). Market price per share { ?   } .

  • 3-1. (Computing earnings per share) If ABC Company earned $280,000 in net income and paid cash...

    3-1. (Computing earnings per share) If ABC Company earned $280,000 in net income and paid cash dividends of $40,000, what are ABC's earnings per share and dividends per share if it has 80,000 shares outstanding? 3-2. (Preparing an income statement) Prepare an income statement and a common-sized income statement from the following information. Sales $525,000 Cost of goods sold 200,000 General and administrative expenses 62,000 Depreciation expenses 8,000 Interest expense 12,000 Income taxes 97,200

  • 1) A company recently paid out a $4 per share dividend on their stock. Dividends are...

    1) A company recently paid out a $4 per share dividend on their stock. Dividends are projected to grow at a constant rate of 5% into the future, and the required return on investment is 8%. After one year, the holding period return to an investor who buys the stock right now will be: A. 5% B. 3% C. 8% D. 13% 2) A company recently paid out a $2 per share dividend on their stock. Dividends are projected to...

  • As a financial analyst, you are tasked with finding the price per share of ABC, a...

    As a financial analyst, you are tasked with finding the price per share of ABC, a telecom company. PartA - For this part, assume that the Gordon growth model for stock valuation holds. The typical company in the telecom industry has a ratio of next period's dividend to current price D1/P0 = 2%, pays out 40% of earnings as dividends, and generates a return on equity of 15%. Your analysis suggests that the discount rate of the typical company in...

  • Measuring growth)  Solarpower Systems earned ​$20 per share at the beginning of the year and paid...

    Measuring growth)  Solarpower Systems earned ​$20 per share at the beginning of the year and paid out ​$8 in dividends to shareholders​ (so, Upper D 0 equals and retained ​$12 to invest in new projects with an expected return on equity of 19 percent. In the​ future, Solarpower expects to retain the same dividend payout​ ratio, expects to earn a return of 19 percent on its equity invested in new​ projects, and will not be changing the number of shares...

  • (Measuring growth) Solarpower Systems earned $20 per share at the beginning of the year and paid...

    (Measuring growth) Solarpower Systems earned $20 per share at the beginning of the year and paid out $8 in dividends to shareholders (so. Do = $8) and retained $12 to invest in new projects with an expected return on equity of 19 percent. In the future, Solarpower expects to retain the same dividend payout ratio, expects to earn a return of 19 percent on its equity invested in new projects, and will not be changing the number of shares of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT