The Following Information Was Taken from the Financial Statement of Fox

question 167

Essay

The following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year:
Common stock, $20 par value (no change during the year)$5,000,000
Preferred 10% stock, $40 par (no change during the year)2,000,000
The net income was $600,000, and the declared dividends on the common stock were $125,000 for the current year. The market price of the common stock is $20 per share.​
Calculate for the common stock:
(a) earnings per share
(b) the price-earnings ratio
(c) the dividends per share and the dividend yield
Round to one decimal place except earnings per share, which should be rounded to two decimal places.

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Definitions:

Wellness Program

A coordinated and comprehensive set of health promotion and protection strategies implemented at the workplace, aimed at improving employee health.

Moral Hazard

Post-contractual increases in risky or negative behavior. Examples are reduced incentive to exercise care once you purchase insurance and reduced incentives to work hard once you have been hired. Moral hazard is similar to adverse selection in that it is caused by information asymmetry; it differs in that it is caused by hidden actions rather than hidden types.

Taxi Driver

A person employed to drive a car or van, which transports passengers to their chosen destinations for a fee.

Piece-rate

A payment method where workers are paid a fixed rate for each unit of production completed, encouraging productivity by directly linking pay to output.