Question

Altar Corp. earned net income of $ 118,000 and paid the minimum dividend to preferred stockholders for 2014. Assume that there are no changes in common shares outstanding. Altar’s books include the following figures:
Preferred Stock—3%, $ 50 Par Value; 2,000 shares authorized,
1,000 shares issued and outstanding .............. $ 50,000
Common Stock—$ 2 Par Value; 80,000 shares authorized,
53,000 shares issued, 51,800 shares outstanding ........ 106,000
Paid-In Capital in Excess of Par—Common ............ 460,000
Treasury Stock—Common; 1,200 shares at cost ......... (24,000)

Requirements
1. Compute Altar’s EPS for the year.
2. Assume Altar’s market price of a share of common stock is $ 8 per share. Compute Altar’s price/earnings ratio for the year.



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  • CreatedJanuary 16, 2015
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