While eating his Kellogg's Frosted Flakes one January morning, Tony noticed the following article in his local
Question:
Kellogg Announces Strong 2008 Performance
As a shareholder, Tony is well aware that Kellogg pays a regular cash dividend of $.34 per share quarterly. A quick click on a price quote service indicated that Kellogg's shares closed at $43.85 on December 31. That web page also reported Kellogg's previous year's EPS as $2.76.
Required:
1. Using the numbers provided, determine the price/earnings ratio for Kellogg Company for 2008. What information does this ratio impart?
2. What is the dividend payout ratio for Kellogg? What does it indicate?
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...
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Step by Step Answer:
Requirement 1 The priceearnings ratio is simply the market price per share divided by the earnings per share For Kellogg the ratio is 4365 299 146 It ...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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