The consolidated statement of earnings for Linamar Corporation appears in Exhibit 11.13A. The company’s dividend policy is presented in. The market price of Linamar’s shares on December 31, 2020, was $67.42.

Required 

a. Calculate Linamar’s price/earnings ratio at December 31, 2020. 

b. Calculate the dividend payout ratio for 2020. 

c. Calculate the return on common shareholders’ equity for 2020 and 2019 and comment on your findings. (Total shareholders’ equity was $4,353,498 thousand at December 31, 2020; $4,029,755 thousand at December 31, 2019; and $3,803,132 thousand at December 31, 2018.)

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LINAMAR CORPORATION Consolidated Statements of Earnings For the years ended December 31, 2020 and December 31, 2019 (in thousands of Canadian dollars, except per share figures) Sales (Note 15) Cost of sales (Note 16) Gross margin Selling, general and administrative (Note 16) Other income and (expenses) (Note 19) Operating earnings (loss) Share of net earnings (loss) of investments accounted for using the equity method Finance income and (expenses) (Note 20) Net earnings (loss) before income taxes Provision for (recovery of) income taxes (Note 8) Net earnings (loss) for the year Net earnings (loss) per share: (Note 21) Basic Diluted 2020 $ 5,815,573 5,027,150 788,423 353,628 (10,603) 424,192 (22,899) (26,909) 374,384 95,251 279,133 4.27 4.27 2019 $ 7,416,624 6,350,782 1,065,842 414,449 (26,892) 624,501 (10,984) (49,110) 564,407 133,966 430,441 6.59 6.56