Reference no: EM132684355

Problem - Earnings per share, price-earnings ratio, dividend yield

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. Round to one decimal place except earnings per share, which should be rounded to two decimal places.

(b) the price-earnings ratio. Round to one decimal place except earnings per share, which should be rounded to two decimal places.

(c) the dividends per share. Round to one decimal place except earnings per share, which should be rounded to two decimal places.

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