The Following Data Were Reported for Favre Company Calculate Each of the Following Ratios:
A

question 51

Short Answer

The following data were reported for Favre Company:
$$\begin{array} { l l } \text { Net income } & \$ 275,000 \\\text { Total dividends declared and paid on common stock } & \$ 0.60 \text { per share } \\\text { Common stock, par } \$ 10 & \$ 1,750,000 \\\text { Market price } & \$ 20.00 \text { per } \\& \text { share } \\\text { Cash flows from operating activities } & \$ 280,000\end{array}$$ Calculate each of the following ratios:
A.Dividend yield
B.Price/earnings ratio
C.Quality of income

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Definitions:

Random Variable

A variable whose possible values are outcomes of a stochastic process, often used in probability and statistics.

Option's Value

The intrinsic and extrinsic value of an options contract, which determines its worth at a given point in time.

Black-Scholes Option Pricing Model

A mathematical model used to estimate the price of European-style options, incorporating factors such as volatility and time to expiration.

Continuous Compounding

The mathematical limit reached when an investment's interest is calculated and added back to the principal at an infinite number of intervals.