Use the Following Selected Financial Data from the Balance Sheet

question 84

Essay

Use the following selected financial data from the balance sheet at the end of Year 2 and Year 1:
$\begin{array}{lrr}&\text { Year } 2&\text { Year } 1\\\text { Net income } & \$ 110,000 & \$ 123,000 \\\text { Cash dividends paid on preferred shares } & \$ 12,000 & \$ 15,000 \\\text { Cash dividends paid on common shares } & \$ 42,000 & \$ 38,000\\\text {Common share repurchases}&\$10,000&\$14,000\\\text {Weighted average number of common shares outstanding}&105,000&95,000\\ \text {Year-end market price per share of common shares}&\$16.00&\$13.00\end{array}$

Using the information provided,address the following questions for both Year 2 and Year 1:
A) What is the dividend yield ratio?

B) What is the earnings per share measure?

C) What is the dividend payout ratio?

D) What is the total payout ratio?

E) What is the share repurchase payout ratio?

F) Comment on the change in the shareholders ratios fram ${ \text {Year } } 1$ to ${ \text {Year } } 2$

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Definitions:

Increase in Price

Describes a situation where the cost of a good or service rises, potentially affecting demand and supply dynamics.

Buyer's Budget

Buyer's budget refers to the amount of money a buyer is willing or able to spend on goods and services at any given time.

Consumption Possibilities

The different combinations of goods and services that a consumer can afford to purchase at given prices and income levels.

Price of Beer

The cost at which beer is sold, influenced by factors such as production costs, taxes, and market demand.