Lesson 13-2 SHARE OF NET INCOME ASSIGNED TO PREFERRED AND COMMON STOCK

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Presentation transcript:

Lesson 13-2 SHARE OF NET INCOME ASSIGNED TO PREFERRED AND COMMON STOCK     Calculating Share of Net Income for Preferred Stock Total Dividend Preferred Stock’s Par Value  Rate = Share of Net Income $170,000.00  8% = $13,600.00     Calculating Share of Net Income for Preferred Stock Preferred Stock’s Total Share of Common Stock’s Net Income  Net Income = Share of Net Income $96,742.51  $13,600.00 = $83,142.51 Lesson 13-2, page 356

    EARNINGS PER SHARE Calculating Earnings per Share Lesson 13-2 EARNINGS PER SHARE     Calculating Earnings per Share Share of Shares of Stock Earnings Net Income ÷ Outstanding = per Share $83,142.51 ÷ 31,950 = $2.60 Lesson 13-2, page 357

    CALCULATING EQUITY PER SHARE Calculating Equity per Share Lesson 13-2 CALCULATING EQUITY PER SHARE     Calculating Equity per Share Total Shares of Stockholders’ Capital Stock Equity Equity ÷ Outstanding = per Share Preferred $170,000.00 Common 448,655.86 ÷ 1,700 ÷ 31,950 = $100.00 = $14.04 Total $618,655.86 Lesson 13-2, page 358

    CALCULATING PRICE-EARNINGS RATIO Lesson 13-2 CALCULATING PRICE-EARNINGS RATIO     Calculating Price-Earning Ratio Market Price Earnings Price-Earnings per Share ÷ per Share = Ratio $19.50 ÷ $2.60 = 7.5 times Lesson 13-2, page 358

TERMS REVIEW earnings per share equity per share market value price-earnings ratio rate earned on average stockholders’ equity rate earned on average total assets Lesson 13-2, page 362