For Year 2,Weston Corporation Reported After-Tax Net Income of $1,200,000

question 90

Essay

For Year 2,Weston Corporation reported after-tax net income of $1,200,000.During the year,the number of outstanding shares of 6% $100 par preferred stock remained constant at 5,000,and 500,000 shares of common stock were outstanding all year.The company's total stockholders' equity at December 31,Year 2,was $12,500,000.Weston's common stock was selling at $38 per share at the end of the year.All dividends for the year were paid,including a dividend of $2.50 per share to common stockholders.
Required:
Compute the following:
(a)Earnings per share (Round your answer to the nearest cent.)
(b)Book value per share of common stock
(c)Price-earnings ratio (Round your answer to one decimal place.)
(d)Dividend yield (Round your answer to one decimal place.)

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Definitions:

Buyer-Seller Relationships

The interactions and associations between individuals or businesses engaging in the exchange of goods and services.

Conglomerate Merger

A type of corporate action where firms in unrelated business activities or industries merge or acquire each other.

Horizontal Merger

A business consolidation that occurs between firms which operate in the same industry, often aimed at reducing competition or achieving economies of scale.

Interlocking Directorate

A situation where one or more members of the board of directors of a corporation are also on the board of directors of a competing corporation; illegal under the Clayton Act.