The MedTech Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1.0 million per year. a. Compute the firm's earnings per share (EPS). b. Assuming that the stock currently trades at $60.00 per share, determine what the firm's dividend yield would be if it paid $ 2.00 per share to common stockholders. c. What would the firm's dividend payout ratio be if it paid $2.00 per share in dividends?

EPS 5.92

dividend yield: 3.33%

payout ratio: 0.3378

Explanation:

Earnings per share:

EPS = (income - preferred dividends) / common stock utstanding

EPS = (15,800,000 - 1,000,000)/ 2,500,000 = 5.92

dividend yield:

dividend per share / market price

$2.00 / $60.00 = 0.03333 = 3.33%

payout ratio:

dividends per share / earning per share

2 / 5.92 = 0,3378

Explanation:

What is given:

Net profit = $15.8m

Common stock = 2.5 m

Preferred dividends = $1m

a. Compute the firm's earnings per share (EPS)

Earnings for Common stockholders = net profit - preferred dividends =

= 15.8 - 1 = 14.8m

EPS = equity/number of shares = 14.8/2.5 = $5.92/share

b. Current stock price = $60

pays $2 to common stockholders

Dividend yield = Dividend per Share*100/Market Price per Share =

= 2*100/60 = $3.33

c.

Paid $2.00 per share in dividends

Dividend payout ratio = DPS/EPS = 2/5.92 = 0.34 = 34%

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.