### Example of Financial Data Analysis for Blue Ridge Corporation**Given Data:**- Blue Ridge Corporation has 9,000,000 shares of common stock with a market price of $80 per share.- The company also has 250,000 shares of $100 par, 9% preferred stock, redeemable at par, with dividends in arrears for 2 years.- The company's net income after tax for the year was $19,350,000.- Dividends amounting to $4.80 per share were paid to common stockholders during the year.**Tasks:****a. Compute Earnings per Share (EPS)**- Earnings per share (EPS) is calculated using the formula: \[ \text{EPS} = \frac{\text{Net Income After Tax} - \text{Preferred Dividends}}{\text{Average Outstanding Common Shares}} \]- Preferred dividends: \[ \text{Preferred Dividends} = \text{Number of Preferred Shares} \times \text{Par Value} \times \text{Dividend Rate} = 250,000 \times 100 \times 0.09 = 2,250,000 \text{ per year} \] Since dividends are in arrears for 2 years: \[ \text{Total Preferred Dividends} = 2,250,000 \times 2 = 4,500,000 \]- Annual Net Income: \[ \text{Remaining Income for Common Shares} = 19,350,000 - 2,250,000 = 17,100,000 \]- Calculate EPS: \[ \text{EPS} = \frac{17,100,000}{9,000,000} = 1.90 \]**b. Compute Book Value per Share**- Book value per share is calculated as: \[ \text{Book Value per Share} = \frac{\text{Total Stockholder's Equity - Preferred Equity}}{\text{Average Outstanding Common Shares}} \] For simplicity, assume that the given equity figure is adjusted for preferred equity.**c. Compute Price-Earnings (P/E) Ratio**- P/E ratio is calculated using the formula: \[ \text{P/E Ratio} = \frac{\text{Market Price

a. EPS = EAT - Preferred dividend / No. of common equity shareEAT = Earning after Tax EAT 4150000…

During Year 3, Blue Ridge Corporation reported after-tax net income of $4,150,000. During the year, the number of shares of stock outstanding remained constant at 15,000 of $100 par, 9 percent preferred stock and 400,000 shares of common stock. The company's total stockholders' equity is $20,000,000 at December 31, Year 3. Blue Ridge Corporation's common stock was selling at $80 per share at the end of its fiscal year. All dividends for the year have been paid, including $4.80 per share to common stockholders. Required a. Compute the earnings per share. (Round your answer to 2 decimal places.) b. Compute the book value per share of common stock. (Round your answer to 2 decimal places.) c. Compute the price-earnings ratio. (Round intermediate calculations and final answer to 2 decimal places.) d. Compute the dividend yield. (Round your percentage answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Earnings per share a. Book value per share times Price-earnings ratio d. Dividend yield

During Year 3, Blue Ridge Corporation reported after-tax net income of $4,150,000. During the year, the number of shares of stock outstanding remained constant at 15,000 of $100 par, 9 percent preferred stock and 400,000 shares of common stock. The company's total stockholders' equity is $20,000,000 at December 31, Year 3. Blue Ridge Corporation's common stock was selling at $80 per share at the end of its fiscal year. All dividends for the year have been paid, including $4.80 per share to common stockholders. Required a. Compute the earnings per share. (Round your answer to 2 decimal places.) b. Compute the book value per share of common stock. (Round your answer to 2 decimal places.) c. Compute the price-earnings ratio. (Round intermediate calculations and final answer to 2 decimal places.) d. Compute the dividend yield. (Round your percentage answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Earnings per share a. Book value per share times Price-earnings ratio d. Dividend yield

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 12RE: Given the following year-end information, compute Greenwood Corporations basic and diluted earnings...

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