Refer to Sanderson Companys financial information in Exercises 17-7 and 17-9. Additional information about the company follows.

Question:

Refer to Sanderson Company’s financial information in Exercises 17-7 and 17-9. Additional information about the company follows. To help evaluate the company’s profitability, compute and interpret the following ratios for 2012 and 2011:

(1) Return on common stockholders’ equity,

(2) Price-earnings ratio on December 31, and

(3) Dividend yield.

Common stock market price, December 31, 2012 . . . . . . . . $15.00

Common stock market price, December 31, 2011 . . . . . . . . 14.00

Annual cash dividends per share in 2012 . . . . . . . . . . . . . . . . 0.30

Annual cash dividends per share in 2011 . . . . . . . . . . . . . . . .0.15

Dividend
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...