Question: The Med Tech Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million per year.
a. Compute the firm's earnings per share (EPS).
b. Assuming that the stock currently trades at $60 per share, determine what the firm's dividend yield would be if it paid $2 per share to common stockholders.
c. What would the firm's dividend payout ratio be if it paid $2 per share in dividends?