Recent financial statements for Madison Company are given below:

Madison Company paid dividends of $3.15 per share during the year.The company's common stock had a market price of $63 per share on December 31.Assets at the beginning of the year totaled $1,100,000 and stockholders' equity totaled $725,000.

Required:

Compute the following:

a.Earnings per share of common stock.
b.Dividend payout ratio.
c.Dividend yield ratio.
d.Price-earnings ratio.
e.Return on total assets.
f.Return on common stockholders' equity.
g.Was financial leverage positive or negative for the year? Explain.

Question

Recent financial statements for Madison Company are given below:

Madison Company paid dividends of $3.15 per share during the year.The company's common stock had a market price of $63 per share on December 31.Assets at the beginning of the year totaled $1,100,000 and stockholders' equity totaled $725,000.

Required:

Compute the following:

a.Earnings per share of common stock.
b.Dividend payout ratio.
c.Dividend yield ratio.
d.Price-earnings ratio.
e.Return on total assets.
f.Return on common stockholders' equity.
g.Was financial leverage positive or negative for the year? Explain.

Quizplus · Accepted Answer

The Answer of Recent financial statements for Madison Company are given below:

Madison Company paid dividends of $3.15 per share during the year.The company's common stock had a market price of $63 per share on December 31.Assets at the beginning of the year totaled $1,100,000 and stockholders' equity totaled $725,000.

Required:

Compute the following:

a.Earnings per share of common stock.
b.Dividend payout ratio.
c.Dividend yield ratio.
d.Price-earnings ratio.
e.Return on total assets.
f.Return on common stockholders' equity.
g.Was financial leverage positive or negative for the year? Explain.

Recent Financial Statements for Madison Company Are Given Below