Return on Common Stockholders’ Equity, Dividend Yield, and Dividend PayoutThe following information relates to Waterloo Components, Inc.: Previous YearCurrent YearNet income$90,000$110,000Preferred stock dividends5,0005,000Average common stockholders' equity2,000,0002,100,000Dividend per common share2.102.20Earnings per share2.902.95Market price per common share, year-end29.5030.00 a. Calculate the company’s return on common stockholders’ equity for each year.b. Calculate the company’s dividend yield for each year.c. Calculate the company’s dividend payout for each year.Round answers to one decimal point. Previous YearCurrent Yeara.Return on Common Stockholder EquityAnswerAnswerb.Dividend YieldAnswerAnswerc.Dividend PayoutAnswerAnswer

Previous YearCurrent YearaReturn on common equity (ROE)4.25%5%bDividend yield7.12%7.33%cDividend…

Answered: Return on Common Stockholders’ Equity,…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 20BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...

See similar textbooks

Related questions

Question

Return on Common Stockholders’ Equity, Dividend Yield, and Dividend Payout

The following information relates to Waterloo Components, Inc.:

	Previous Year	Current Year
Net income	$90,000	$110,000
Preferred stock dividends	5,000	5,000
Average common stockholders' equity	2,000,000	2,100,000
Dividend per common share	2.10	2.20
Earnings per share	2.90	2.95
Market price per common share, year-end	29.50	30.00

a. Calculate the company’s return on common stockholders’ equity for each year.
b. Calculate the company’s dividend yield for each year.
c. Calculate the company’s dividend payout for each year.

Round answers to one decimal point.