Concave Systems presently has earnings before interest and taxes of $3,000,000. Its interest expenses are $500,000 a
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Concave Systems presently has earnings before interest and taxes of $3,000,000. Its interest expenses are $500,000 a year, and it pays $600,000 in annual dividends to its shareholders. Concave has 300,000 common shares outstanding, and its tax rate is 40 percent. Its annual capital expenditures are $900,000. Concave’s present price-earnings ratio is 12.
a. Calculate the company’s earnings per share.
b. Calculate the company’s dividend payout ratio.
c. Calculate the company’s dividend yield.
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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Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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