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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.

#### 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