Question: The balance sheet for Garcon Inc at the end of

The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:
Bonds payable, 8% (issued in 2004, due in 2024) ... $5,000,000
Preferred $4 stock, $50 par............ 2,500,000
Common stock, $10 par .............. 5,000,000
Income before income tax was $3,000,000, and income taxes were $1,200,000 for the current year. Cash dividends paid on common stock during the current year totaled $1,200,000. The common stock was selling for $32 per share at the end of the year. Determine each of the following:
(a) Number of times bond interest charges are earned,
(b) Number of times preferred dividends are earned,
(c) Earnings per share on common stock,
(d) Price-earnings ratio,
(e) Dividends per share of common stock.
(f) Dividend yield. Round to one decimal place, except earnings per share, which should be rounded to two decimal places.

View Solution:

Sale on SolutionInn
  • CreatedFebruary 28, 2014
  • Files Included
Post your question