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Calculating Dividends, Book Value, PE Ratio

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