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    Calculating Dividends, Book Value, PE Ratio

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    A and B, Inc. is primarily engaged in the worldwide production, processing, distribution, and marketing of food products. The following information is from its 2003 annual report:

    2003 2002

    Earnings per share $1.08 $1.14
    Cash dividends per common share $0.80 $0.76
    Market price per common share $12.94 $15.19
    Common shares outstanding 25,380,000 25,316,000
    Total assets $1,264,086,000 $1,173,924,000
    Total liabilities $823,758,000 $742,499,000
    Non redeemable preferred stock $16,600,000 $16,600,000
    Preferred dividends $4,567,000 $930,000
    Net income $32,094,000 $31,049,000

    a) Based on these data, compute the following for 2003 and 2002:

    1. Percentage of earnings retained
    2. Price/earning ratio
    3. Dividend pay out
    4. Dividend yield
    5. Book value per share

    b) Discuss your findings from the viewpoint of a potential investor.

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    Solution Preview

    A and B, Inc. is primarily engaged in the worldwide production, processing, distribution, and marketing of food products. The following information is from its 2003 annual report:

    2003 2002

    Earnings per share $1.08 $1.14
    Cash dividends per common share $0.80 $0.76
    Market price per common share $12.94 $15.19
    Common shares outstanding 25,380,000 25,316,000
    Total assets $1,264,086,000 $1,173,924,000
    Total liabilities $823,758,000 $742,499,000
    Non redeemable preferred ...

    Solution Summary

    This solution is comprised of a detailed explanation to calculate dividends, book value, and PE ratio of A and B, Inc.

    $2.19