Question: While eating his Kellogg s Frosted Flakes one January morning T

While eating his Kellogg's Frosted Flakes one January morning, Tony noticed the following article in his local paper:

Kellogg Announces Strong 2008 Performance

As a shareholder, Tony is well aware that Kellogg pays a regular cash dividend of $.34 per share quarterly. A quick click on a price quote service indicated that Kellogg's shares closed at $43.85 on December 31. That web page also reported Kellogg's previous year's EPS as $2.76.

1. Using the numbers provided, determine the price/earnings ratio for Kellogg Company for 2008. What information does this ratio impart?
2. What is the dividend payout ratio for Kellogg? What does it indicate?

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  • CreatedJuly 11, 2013
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