Calculate the EPS and common dividends per share

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Question - Maxim Company has a current operating profit of $275,000 before taxes. Interest expense is $10,000, dividends paid on preferred shares were $18,000, and common dividends paid of $36,000. The company paid taxes of $34,250. The company has 25,000 outstanding common shares.

Required -

1. Calculate the EPS and common dividends per share.

2. Calculate the payout ratio.

3. Determine the increase in retained earnings for the year.

4. If the share price is $14.00, calculate the price-earnings (P/E) ratio.

Reference no: EM133104326

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