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Sweetman Corporation Has Provided the Following Financial Data (In Thousands

Question 185

Essay

Sweetman Corporation has provided the following financial data (in thousands of dollars):  Year 2  Year 1  Total assets. $1,310$1,290 Stockholders’ equity:  Preferred stock, $100 par value, 10%$200$200Common stock, $1 par value $200$200Additional paid-in capital–common stock $160$160Retained earnings $350$330\begin{array}{ll}&\text { Year 2 } & \text { Year 1 } \\\text { Total assets. }&\$ 1,310 & \$ 1,290\\\text { Stockholders' equity: }\\\text { Preferred stock, \( \$ 100 \) par value, \( 10 \% \)}&\$ 200 & \$ 200 \\\text {Common stock, \$1 par value }&\$ 200 & \$ 200 \\\text {Additional paid-in capital--common stock }&\$ 160 & \$ 160 \\\text {Retained earnings }&\$ 350 & \$ 330\end{array} Net income for Year 2 was $120 thousand.Interest expense was $25 thousand.The tax rate was 30%.Dividends on common stock during Year 2 totaled $80 thousand.Dividends on preferred stock totaled $20 thousand.The market price of common stock at the end of Year 2 was $4.75 per share.
Required:
Compute the following for Year 2:
a.Earnings per share (of common stock).
b.Price-earnings ratio.
c.Dividend payout ratio.
d.Dividend yield ratio.
e.Return on total assets.
f.Return on common stockholders' equity.
g.Book value per share.

Correct Answer:

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a.Number of common shares outstanding = ...

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