a. 1. Percentage of Earnings Retained = Net income - all dividends / net income
|
Net income (A)
Less:
Common dividends
Preferred dividends
(B)
(A) - (B) = (C)
(C) ÷ (A)
|
$31,200,000
21,700,000
910,000
$22,610,000
8,590,000
27.53%
|
$30,600,000
19,500,000
910,000
$20,410,000
10,190,000
33.30%
|
$29,800,000
18,360,000
910,000
$19,270,000
10,530,000
35.34%
|
2. Price/Earnings Ratio = Market Price per Share
Fully Diluted Earnings per Share
$12.80 $14.00 $16.30
$1.12 $1.20 $1.27
= 11.43 = 11.67 = 12.83
3. Dividend Payout = Dividends per Common Share
Fully Diluted Earnings per Share
$0.90 $0.85 $0.82
$1.12 $1.20 $1.27
= 80.36% = 70.83% = 64.57%
4. Dividend Yield = Dividends per Common Share
Market Price per Common Share
$0.90 $0.85 $0.82
$12.80 $14.00 $16.30
= 7.03% = 6.07% = 5.03%
Total Stockholders' Equity -
5. Book Value per Share = Preferred Stock Equity
Number of Common Shares Outstanding
|
Total assets
Less:
Liabilities
Stockholders' equity
Less:
Nonredeemable preferred
stock
(A) Common stock equity
(B) Shares outstanding
end of year
(A) ÷ (B)
|
$1,280,100,000
(800,400,000)
479,700,000
(15,300,000)
$ 464,400,000
24,280,000
$19.13
|
$1,267,200,000
(808,500,000)
458,700,000
(15,300,000)
$ 443,400,000
23,100,000
$19.19
|
$1,260,400,000
(799,200,000)
461,200,000
(15,300,000)
$ 445,900,000
22,500,000
$19.82
|
b. The percentage of earnings retained is reduced. The related ratio, dividend payout, is hence increasing. The P/E ratio has been stable. The dividend yield has increased and is high. The Market price per share is below the book value. It seems that stock is purchased for high dividend and not for growth potential.