Calculate the price earnings ratio

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Question - Sheridan Inc. had net income for 2020 of $5,800,000. The company had 2,060,000 of common shares outstanding throughout the year. During 2020, Sheridan paid dividends on the common shares of $0.16 per share. Average common shareholder equity was $32,960,000, and the market value of the shares on December 31, 2020 was $22 per share.

Sheridan Inc. also had 100,000 shares outstanding of cumulative, $4, no-par value preferred shares. The shares were outstanding for the full year, and dividends had been kept current for the past several years.

Calculate the following ratios for Sheridan Inc.:

(a) Rate of return on common shareholders' equity

(b) Payout ratio

(c) Price earnings ratio

(d) Book value per share

Reference no: EM133008908

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