The following information was available for the year ended December 31, 2022 Dividende per share Earnings per share Market price per share at year and 1.35 Required: a. Calculate the price/earrings ratio for 2022. Note: Round your answer to 2 decimal places. b. Calculate the dividend payout ratio for 2022 Note: Round your percentage answer to 2 decimal places (La, 9.1234 should be entered as c. Calculate the dividend yield for 2022. Note: Round your percentage answer to 2 decimal places (.a., 0.1234 should be entered as 12.34) Price/Eaming ratio b. Dividend payout ratio c. Dividend yield ## Stock Valuation Ratios CalculationGiven the following information for the year ended December 31, 2022:- **Dividends per share:** \$1.95- **Earnings per share:** \$3.90- **Market price per share at year-end:** \$29.20**Required Calculations:**### a. Price/Earnings Ratio for 2022**Note:** Round your answer to 2 decimal places.**Formula:** \[\text{Price/Earnings Ratio} = \frac{\text{Market Price per Share}}{\text{Earnings per Share}}\]### b. Dividend Payout Ratio for 2022**Note:** Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).**Formula:** \[\text{Dividend Payout Ratio} = \left( \frac{\text{Dividends per Share}}{\text{Earnings per Share}} \right) \times 100 \]### c. Dividend Yield for 2022**Note:** Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).**Formula:** \[\text{Dividend Yield} = \left( \frac{\text{Dividends per Share}}{\text{Market Price per Share}} \right) \times 100\]### Calculation Table| Calculation | Formula Applied | Result ||-----------------------------|---------------------------------------------------------------------------------|---------------|| **a. Price/Earnings Ratio** | $\frac{\$29.20}{\$3.90}$ | || **b. Dividend Payout Ratio**| $\left( \frac{\$1.95}{\$3.90} \right) \times 100$ | || **c. Dividend Yield** | $\left( \frac{\$1.95}{\$29.20} \right) \times 100$ | |Fill in the boxes based on your calculations.This exercise helps in understanding crucial financial metrics that investors use to assess the value and performance of a company's stock. Make sure to follow the rounding instructions precisely for accurate results.

Price earnings ratio is the ratio between market price per share and earnings per share. Dividend…

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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The following information was available for the year ended December 31, 2022 Dividende per share Earnings per share Market price per share at year and 1.35 Required: a. Calculate the price/earrings ratio for 2022. Note: Round your answer to 2 decimal places. b. Calculate the dividend payout ratio for 2022 Note: Round your percentage answer to 2 decimal places (La, 9.1234 should be entered as c. Calculate the dividend yield for 2022. Note: Round your percentage answer to 2 decimal places (.a., 0.1234 should be entered as 12.34) Price/Eaming ratio b. Dividend payout ratio c. Dividend yield

## Stock Valuation Ratios Calculation

Given the following information for the year ended December 31, 2022:

- **Dividends per share:** \$1.95
- **Earnings per share:** \$3.90
- **Market price per share at year-end:** \$29.20

**Required Calculations:**

### a. Price/Earnings Ratio for 2022
**Note:** Round your answer to 2 decimal places.

**Formula:**
\[
\text{Price/Earnings Ratio} = \frac{\text{Market Price per Share}}{\text{Earnings per Share}}
\]

### b. Dividend Payout Ratio for 2022
**Note:** Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).

**Formula:**
\[
\text{Dividend Payout Ratio} = \left( \frac{\text{Dividends per Share}}{\text{Earnings per Share}} \right) \times 100
\]

### c. Dividend Yield for 2022
**Note:** Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).

**Formula:**
\[
\text{Dividend Yield} = \left( \frac{\text{Dividends per Share}}{\text{Market Price per Share}} \right) \times 100
\]

### Calculation Table

| Calculation | Formula Applied | Result |
|-----------------------------|---------------------------------------------------------------------------------|---------------|
| **a. Price/Earnings Ratio** | $\frac{\$29.20}{\$3.90}$ | |
| **b. Dividend Payout Ratio**| $\left( \frac{\$1.95}{\$3.90} \right) \times 100$ | |
| **c. Dividend Yield** | $\left( \frac{\$1.95}{\$29.20} \right) \times 100$ | |

Fill in the boxes based on your calculations.

This exercise helps in understanding crucial financial metrics that investors use to assess the value and performance of a company's stock. Make sure to follow the rounding instructions precisely for accurate results.

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