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Author Question: Using the following information for Tiger Inc calculate earnings per share, the price-to earnings ... (Read 136 times)

Lobcity

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on: Jul 6, 2018
Using the following information for Tiger Inc calculate earnings per share, the price-to earnings ratio, dividend payout and dividend yield for the firm. Analyze these market ratios.
 
  2015 2014
  Net income 960 million 854 million
  Shares of common stock outstanding 420 million 419 million
  Dividends per share  1.75  1.60
  Market price per share 56 50
 
 
 
 What will be an ideal response?

Question 2

Which of the following is recorded in the sales journal?
 a. return of merchandise purchased for cash
   b. sale of merchandise for cash
   c. sale of merchandise on account
   d. return of merchandise purchased on account
   e. purchase of merchandise for cash


31809pancho

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Reply #1 on: Jul 6, 2018
Answer to Question 1

2015 2014
Earnings per share 2.29 2.04
PE ratio 24.45 24.51
Dividend payout 76.42 78.43
Dividend yield 3.13 3.20

The earnings per share has increased, but the market has not reacted to the change as evidenced by the stable PE ratio. The dollar amount of dividends has increased but the dividend payout and yield have declined slightly as the dividends did not go up as fast as the earnings per share and market price of stock. Given the low interest rates in 2014 and 2015, shareholders are realizing a good return of over 3 in dividends from their investment.

Answer to Question 2

c


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