The balance sheet for Collier Medical, Inc., at the end of the current fiscal year indicated the

Question:

The balance sheet for Collier Medical, Inc., at the end of the current fiscal year indicated the following:

Bonds payable, 12% (issued in 1996, due in 2016) ..$1,500,000

Preferred $10 stock, $100 par .............250,000

Common stock, $20 par .............2,500,000

Income before income tax was $450,000, and income taxes were $125,000 for the current year. Cash dividends paid on common stock during the current year totaled $100,000. The common stock was selling for $50 per share at the end of the year. Determine each of the following:

(a) Number of times bond interest charges were earned,

(b) Earnings per share on common stock,

(d) Dividends per share of common stock, and

(e) Dividend yield. Round to two decimal places.

Common Stock
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