Accounting

| January 28, 2015
David’s Magic Stores has an operating profit of $210,000. Interest expense for the year was $30,000; preferred dividends paid were $24,700; and common dividends paid were $36,000. The tax was $59,300. David’s Magic Stores has 16,000 shares of common stock outstanding.

 

a. Calculate the earnings per share and the common dividends per share for David’s Magic Stores.(Round your answers to 2 decimal places.)

 

Earnings per share $
Common dividends per share $

 

b. What is the payout ratio? (Round your answer to 1 decimal place.)

 

Payout ratio %

 

c. What was the increase in retained earnings for the year?
Increase in retained earnings $

 

d. If David’s share price is $90.00 what is its price-earnings ratio (P/E)?

 

Price earning ratio x

 

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