Question: 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

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.


Step by Step Solution

3.51 Rating (184 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a b C d e Number of Times Bond Interest Charges Are Earned 3000000 400000 400000 5000... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

278-B-M-A-F-S-A (1615).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!