The following data relate to Edger Company:
2007 2006 2005
|
Earnings per share
|
$2.30
|
$3.40
|
$4.54
|
|
Dividends per share
|
$1.90
|
$1.90
|
$1.90
|
|
Market price, end of year
|
$41.25
|
$35.00
|
$29.00
|
|
Net income
|
$9,100,000
|
$13,300,000
|
$16,500,000
|
|
Total cash dividends
|
$6,080,000
|
$5,900,000
|
$6,050,000
|
|
Order backlog at year-end
|
$5,490,800,000
|
$4,150,200,000
|
$3,700,100,000
|
|
Net contracts awarded
|
$2,650,700,000
|
$1,800,450,000
|
$3,700,100,000
|
Note: The stock was selling at 120.5%, 108.0%, and 105.0% of book value in 2007, 2006, and 2005, respectively.
Required:
a. Compute the following for 2007, 2006, and 2005:
1. Percentage of earnings retained
2. Price/earnings ratio
3. Dividend payout
4. Dividend yield
5. Book value per share
b. Comment on your results from (a). Include in your discussion the data on backlog and new contracts awarded.