Question: The balance sheet for Kronos Inc. at the end of the current fiscal year indicated the following: Bonds payable, 10% (issued in 2002, due in

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

Bonds payable, 10% (issued in 2002, due in 2022) ...........$3,750,000

Preferred $4 stock, $40 par ..................... 2,000,000

Common stock, $10 pat ....................... 3,600,000

Income before income tax was $2,400,000, and income taxes were $400,000 for the current year. Cash dividends paid on common stock during the current year totaled $720,000. The common stock was selling for $72 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) Earning 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 expect earnings per share, which should be rounded to two decimal place.


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