Determine the number of times bond interest charges


Response to the following problem:

The balance sheet for Shryer Industries Inc. at the end of the current fiscal year indicated the following:

Bonds payable, 5% (issued in 2000, due in 2020)             $8,000,000

Preferred $4 stock, $75 par                                           15,000,000

Common stock, $7 par                                                  3,500,000

Income before income tax was $3,400,000, and income taxes were $1,000,000 for the current year. Cash dividends paid on common stock during the current year totaled $100,000. The common stock was selling for $8 per share at the end of the year. Determine each of the following:

(a) number of times bond interest charges are earned,

(b) number of times preferred dividends are earned,

(c) earnings per share on common stock,

(d) price-earnings ratio,

(e) dividends per share of common stock, and

(f) dividend yield.

Round to one decimal place except earnings per share, which should be rounded to two decimal places

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Financial Accounting: Determine the number of times bond interest charges
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