Sperle Corporation Has Provided the Following Data Concerning Its Stockholders

question 56

Multiple Choice

Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share. The company's earnings per share for Year 2 is closest to:

• A)$8.18 per share
• B)$0.38 per share
• C)$0.54 per share
• D)$0.68 per share

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Definitions:

Dividend Growth Model

A valuation method used to estimate the price of a stock by using predicted dividends and discounting them back to their present value.

Dividend Yield

This financial statistic demonstrates a company's dividend payments per year compared to its current stock price.

Capital Gains Yield

The price appreciation component of a stock's total return, excluding dividends, calculated as the change in price over a period divided by the initial price.