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19 October, 05:02

Papa Roach Exterminators, Inc., has sales of $659,000, costs of $345,000, depreciation expense of $45,000, interest expense of $22,000, and a tax rate of 40 percent. The firm paid out $109,000 in cash dividends, and has 30,000 shares of common stock outstanding.

a. What is the earnings per share, or EPS, figure?

b. What is the dividends per share figure?

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  1. 19 October, 05:18
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    a. What is the earnings per share, or EPS, figure?

    $4.94 / share

    b. What is the dividends per share figure?

    $3.63 / share

    Explanation:

    Sales = $659,000

    Costs = ($345,000)

    Gross Income = $314,000

    Depreciation expense = ($45,000)

    Operating Income = $269,000

    Interest expense = ($22,000)

    Profit before tax = $247,000

    Tax 40% = ($98,800)

    Net Income = $148,200

    Dividend = $109,000

    Common stock outstanding = 30,000 shares

    a.

    Earning per share = $148,200 / 30,000 = $4.94 / share

    b.

    Dividend per share = $109,000 / 30,000 = $3.63 / share
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