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Compute for the dividends for common shares

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Reference no: EM131601655

The following information pertains to TQM company for year-end 2016.

Earnings before interest and taxes = P 3,000,000

Capital structure consists of the following:

      Debts – 1,000 , 15%, P 5,000 value per bond,

      Preferred Shares – 12%, 5,000, P1000 par

      Ordinary equity shares – 10,000 shares , P100 par

Corporate Tax rate – 32%

For 2016, 60% of Earnings after interest and taxes will be distributed as dividends.

Assume that interest, taxes, dividends are paid annually.

A. Compute for the EAIT. P_____

B.. Compute for the dividends for common shares.

Common Shares= P____

Reference no: EM131601655

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