Menu QUESTION 1 Not yet answered Points out of 6.00P Flag queston Return on Comm

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Menu QUESTION 1 Not yet answered Points out of 6.00P Flag queston Return on Common Stockholders' Equity, Dividend Yield, and Dividend Payout The following information relates to Litchfield, Inc. 2015 2016 Net income Preferred stock dividends Average common stockholders' equity 4,000,000 Dividend per common share Earnings per share Market price per common share, year-end 58.00 $160,000 $200,000 5,00015,000 4,200,000 3.50 3.70 580 5.90 59.50 a Calculate the company's return on common stockholders' equity for 2015 and 2016 b. Calculate the company's dividend yield for 2015 and 2016 c. Calculate the company's dividend payout for 2015 and 2016 Round answers to one decimal point 2015 2016 a. Return on Common Stockholder Equity b. Dividend Yield c. Dividend Payout

Explanation / Answer

Particulars 2015 2016 Net Income          1,60,000          2,00,000 Preferred Stock Dividend              15,000              15,000 Average Common Stockholders Equity        40,00,000        42,00,000 Dividend Per Common Share 3.50 3.70 Earning Per share 5.80 5.90 Market Price per Common Stock 58.00 59.50 A Companies Return on Common Stockholders Equity 2015 2016 (Net Income-Preferred Stock Dividend)/Average Common Stockholders Equity (160000-15000)/4000000 3.63% (200000-15000)/4200000 4.40% B Dividend Yield 2015 2016 Annual Dividend/Stock Market Price 3.50/58 6.03% 3.70/59.50 6.22% C Dividend Payout 2015 2016 Dividend Per Share/Earning Per Share 3.50/5.80 60.34% 3.70/5.90 62.71%

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