Question Details

common stock






4.	Columbia Inc. reported the following financial data in its December 31, 2010 report to shareholders.

Preferred Stock, 8%, $100 Par	$ 40,000
Common Stock, $10 par, 20,000 Shares	
Issued and Outstanding	200,000
Paid-In Capital in Excess of Par	160,000
Retained Earnings	170,000

In 2011, the firm reported the following (presented in partial form).

Operating income	$120,000
Interest expense	  30,000
Earnings before tax	$ 90,000
Tax	  40,000
Net income	$ 50,000

On July 15, 2011, the common stock was split 2 for 1. The common stock dividends were declared and paid as follows.

1st Quarter	$0.28
2nd Quarter	 0.28
3rd Quarter	 0.15
4th Quarter	 0.15

The year-end market price for 2011 was $18.00.

Required:
For 2011, compute:
a.	earnings per share
b.	dividends per share based on ending shares
c.	the degree of financial leverage
d.	percentage of earnings retained
e.	dividend payout
f.	dividend yield
g.	Price/earnings ratio
h.	Book value per share






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