Determine the dividend payout ratio


Response to the following problem:

The Amherst Company has net profits of $10 million, sales of $150 million, and 2.5 million shares outstanding. The company has total assets of $75 million and total shareholders' equity of $45 million. It pays $1 per share in dividends, and the share trades at $20.

Given this information, determine the following:

a. Amherst's EPS

b. Amherst's book value per share and price-to-book-value ratio

c. The company's P/E ratio

d. The company's net profit margin

e. The share's dividend payout ratio and its dividend yield

f. The share's PEG ratio, given that the company's earnings have been growing at an average annual rate of 7.5%

 

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Financial Accounting: Determine the dividend payout ratio
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