An investor is trying to decide whether to invest in the long-term bonds and common stock of

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An investor is trying to decide whether to invest in the long-term bonds and common stock of Mayer Company and Matthews Company. Both companies operate in the same industry. Both also pay a dividend per share of $8 and have a yield of 10 percent on their long-term bonds. Other data for the two companies are as follows:
An investor is trying to decide whether to invest in

Compute the debt to equity, interest coverage, and price/earnings (P/E) ratios as well as the dividends yield and comment on the results. (Note: Round computations to one decimal place.)

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Financial Accounting

ISBN: 978-0538476010

11th edition

Authors: Belverd E. Needles, Marian Powers

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