Question: The balance sheet for Chaney Resources Inc. at the end of the current fiscal year indicated the following: Bonds payable, 10% (issued in 1995, due

The balance sheet for Chaney Resources Inc. at the end of the current fiscal year indicated the following:

Bonds payable, 10% (issued in 1995, due in 2015) ... $2,250,000

Preferred $25 stock, $200 par ........... 500,000

Common stock, $10 par ............. 2,500,000

Income before income tax was $625,000, and income taxes were $175,000 for the current year. Cash dividends paid on common stock during the current year totaled $125,000.

The common stock was selling for $25 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, and

(f) Dividend yield.

Round to one decimal place except earnings per share, which should be rounded to two decimal places.


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