Percentage of earnings retained

Reference no: EM131004122

The following data relate to Edger Company:

2007 2006 2005

Earnings per share	$2.30	$3.40	$4.54
Dividends per share	$1.90	$1.90	$1.90
Market price, end of year	$41.25	$35.00	$29.00
Net income	$9,100,000	$13,300,000	$16,500,000
Total cash dividends	$6,080,000	$5,900,000	$6,050,000
Order backlog at year-end	$5,490,800,000	$4,150,200,000	$3,700,100,000
Net contracts awarded	$2,650,700,000	$1,800,450,000	$3,700,100,000

Note: The stock was selling at 120.5%, 108.0%, and 105.0% of book value in 2007, 2006, and 2005, respectively.

Required:

a. Compute the following for 2007, 2006, and 2005:

1. Percentage of earnings retained

2. Price/earnings ratio

3. Dividend payout

4. Dividend yield

5. Book value per share

b. Comment on your results from (a). Include in your discussion the data on backlog and new contracts awarded.

Reference no: EM131004122

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