Page 584, #10. The stock of North American Dandruff Company is selling at $80 per share. The firm pays a dividend of $2.50 per share. Stock price $80 Dividend $2.50 a. What is the dividend yield? 3.125% b. If the firm has a payout rate of 50 percent, what is the firm's P/E ratio? 16.00 Page 584, #14. Philips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assets Cash $312,500 Accounts receivable 800,000 Fixed Assets 987,500 Total Assets $2,100,000 Liabilities and Stockholders’ Equity Accounts payable $445,000 Long-term payable 280,000 Common stock (250,000 shares at $2 par) 500,000 Retained earnings 875,000 Total liabilities and stockholders' equity $2,100,000 a. From a legal perspective, what is the maximum amount of dividends per share the firm could pay?
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