1. The following were reflected from the records of War Freak Company: Earnings before interest and taxes = P1,250,000 Interest expense = 250,000 Preferred dividends = 200,000 Payout ratio = 40 percent Shares outstanding throughout 2013: Preferred = 20,000 Common = 25,000 Income tax rate = 40 percent Price earnings ratio = 5 times The dividend yield ratio is a. 0.50 b. 0.40 c. 0.12 d. 0.08
Please provide the solutions and the correct answers. thank you!
1. The following were reflected from the records of War Freak Company:
Earnings before interest and taxes = P1,250,000
Interest expense = 250,000
Preferred dividends = 200,000
Payout ratio = 40 percent
Shares outstanding throughout 2013:
Preferred = 20,000
Common = 25,000
Income tax rate = 40 percent
Price earnings ratio = 5 times
The dividend yield ratio is
a. 0.50
b. 0.40
c. 0.12
d. 0.08
2. The Delta Company projects the following for the upcoming year:
Earnings before interest and taxes = P40 million
Interest expense = P 5 million
Preferred stock dividends = P 4 million
Common stock dividend payout ratio = 20%
Average number of common shares outstanding = 2 million
Effective corporate income tax rate = 40%
The expected dividend per share of common stock is
a. P1.70
b. P1.86
c. P2.10
d. P1.00
3. Following are selected data taken from the records of Jemson Company:
Income before tax = P200,000
Income tax rate = 40%
Dividend payout ratio = 0.80
Number of common shares outstanding = 10,000 shares
How much dividends per share did the company pay during the year?
a. P9.60
b. P6.40
c. P16
d. P15
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