The following information pertains to Bridgeport Co.: Preferred stock, cumulative:
Par value per share $100
Dividend rate 6%
Shares outstanding 10,000
Dividends in arrears none
Common stock:
Par value per share $10
Shares issued 140,000
Dividends paid per share $1.80
Market price per share $52
Additional paid-in capital $500,000
Unappropriated retained
earnings (after closing) $280,000
Retained earnings
appropriated for
contingencies $300,000
Common treasury stock:
Number of shares 10,000
Total cost $250,000
Net income $580,000
Compute (assume no changes in balances during the past year):
A) Total amount of stockholders' equity in the balance sheet.
B) Earnings per share of common stock.
C) Book value per share of common stock.
D) Payout ratio of common stock.
E) Return on common stock equity per share per share.

A. Total amount of stockholders' equity in the balance sheet.

= Preferred stock + Common Stock + Additional Paid-In Capital + Unappropriated retained earnings + Retained earnings  appropriated for  contingencies - Treasury stock

= (100 * 10,000) + (10 * 140,000) + 500,000 + 280,000 + 300,000 - 250,000

= $‭3,230,000‬

B. Earnings per share of common stock.

= (Net Income - Preferred Dividends ) / (Common stock - treasury stock)

= (580,000 - (10,000 * 6% * 100) ) / (140,000 - 10,000)

= $4

C. Book value per share of common stock.

= (Stockholder's equity - Preferred stock) / ( Common stock - Treasury)

= (3,230,000 - (100 * 10,000) ) / (140,000 - 10,000)

= $17.15

D. Payout ratio of common stock

= Dividend per share/ Earnings per share

= 1.8/4

= 45%

E. Return on common stock equity

= (Net Income - Preferred Dividends ) / (Stockholder's equity - Preferred stock)

= (580,000 - (10,000 * 6% * 100) / (3,230,000 - (100 * 10,000) )

= 0.233

= 23.3%

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.

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