Question: Consecutive five year balance sheets and income statements of Do

Consecutive five-year balance sheets and income statements of Donna Szabo Corporation are shown below and on the following page.
Required
a. Compute or determine the following for the years 2005–2009:
1. Degree of financial leverage
2. Earnings per common share
3. Price/earnings ratio
4. Percentage of earnings retained
5. Dividend payout
6. Dividend yield
7. Book value per share
8. Materiality of options (use stock options outstanding)
b. Comment from the perspective of an investor.
Additional data:
1. Preferred stock dividends (in thousands):
2009 .....$3,920
2008 .....$6,100
2007 .....$6,400
2006 .....$6,600
2005 .....$6,000
2. Common shares outstanding, 29,000,000 (actual) (2005–2009)
3. Stock options outstanding, 1,000,000 (actual) (2005–2009)
4. Dividends per common share (actual):
2009 .....$3.16
2008 .....$2.29
2007 .....$2.10
2006 .....$2.93
2005 .....$2.80
5. Market price per common share (actual):
2009 .....$24.00
2008 .....$22.00
2007 .....$21.00
2006 .....$37.00
2005 .....$29.00


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  • CreatedJune 23, 2012
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