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Rossdale, Inc., had additions to retained earnings for the year just ended of $640,000. The firm paid out $55,000 in cash dividends, and it has ending total equity of $7.35 million.

If the company currently has 720,000 shares of common stock outstanding, what are earnings per share? Dividends per share? What is book value per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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Answer:

Earnings per share is $0.89 per share

Dividends per share is $0.08 per share

Book value per share is $10.21 per share

Explanation:

Additions to Retained Earning = Net Income = $640,000

Dividend Paid = $55,000

Total Equity = $7.35 million = $7,350,000

Common stock outstanding = 720,000 shares

Earning Per Share = Net Income / Number of Outstanding shares

Earning Per Share = $640,000 / 720,000 = $0.89 per share

Dividend per share = Dividend Paid / Number of Outstanding shares

Dividend per share = $55,000 / 720,000 = $0.08 per share

Book value per share = Total Equity / Number of Outstanding shares

Book value per share = $7,350,000 / 720,000 = $10.21 per share

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