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  • QS 11

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    Zunair Fiaz
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    The document calculates a company's payout ratio by dividing its dividend per share by its earnings per share, which equals 12.50%. It also determines the company's equity portion by multiplying its number of outstanding shares by the price per share minus the dividend, which is $39.2 million. Finally, it computes the debt-to-equity ratio by dividing total debt by total equity, which equals 0.4592.

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    The document calculates a company's payout ratio by dividing its dividend per share by its earnings per share, which equals 12.50%. It also determines the company's equity portion by multiplying its number of outstanding shares by the price per share minus the dividend, which is $39.2 million. Finally, it computes the debt-to-equity ratio by dividing total debt by total equity, which equals 0.4592.

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    6 views1 page

    QS 11

    Uploaded by

    Zunair Fiaz
    The document calculates a company's payout ratio by dividing its dividend per share by its earnings per share, which equals 12.50%. It also determines the company's equity portion by multiplying its number of outstanding shares by the price per share minus the dividend, which is $39.2 million. Finally, it computes the debt-to-equity ratio by dividing total debt by total equity, which equals 0.4592.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    A:

    Payout ratio = $0.80/$6.40

    Payout ratio = .1250 or 12.50%

    B:

    Equity portion = 7,000,000 shares ($6.40 – .80) = $39,200,000

    D/E ratio = $18,000,000/$39,200,000 = .4592

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