Chapter 9 Solutions

Chapter 9 Solutions - Chapter 9 For the Investor TO THE NET...

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Unformatted text preview: Chapter 9 For the Investor TO THE NET 1. a. 200 6 200 5 200 4 Earnings per common Basic income (loss) per share: Continuing operations $ 1.65 $ 0.74 $ 0.30 Discontinued operations (.03 ) (.03 ) .12 Disposal of discontinued operations (.10 ) .33 .01 Net income $ 1.52 $ 1.04 $ .43 Diluted income (loss) per share: Continuing operations $ 1.48 $ .69 $ .31 Discontinued operations (.03 ) (.02 ) .11 Disposal of discontinued operations (.08 ) .29 .01 Net income $ 1.37 $ .96 $ .43 b. Price / Earnings Ratio Market Price Per Share Diluted Earnings Per Share Before Nonrecurring Items 2006 2005 2004 $39.09 = 26.41 $24.43 = 35.41 $23.20 = 74.84 1.48 .69 .31 c. Percentage of Earnings Retained Net Income Before Nonrecurring Items – All Dividends Net Income Before Nonrecurring Items 2006 $71,563 - $8,736 = $62,827 = 87.79% $71,563 $71,563 2005 $33,568 - $9,116 = $24,452 = 72.84% $33,568 $33,568 8 2004 $10,700 - $7,292 = $3,408 = 31.85% $10,700 $10,700 9 d. Dividend Payout Dividends Per Common Share Diluted Earnings Per Share Before Nonrecurring items 2006 2005 2004 $.20 $.20 $.20 $1.48 $.69 $.31 13.51% 28.99 % 64.52 % e. Dividend Yield Dividends per Common Share Market price per Common Share 2006 2005 2004 $.20 $.20 $.20 $39.09 $24. 43 $23. 20 .51% .82% .86% 2. Motorola 2006 2005 2004 Other charges (income) $ 2 $ (404,000,000) $ 149,000,000 Gains on sales of investments and businesses, net $ 4 $ 1,845,000,000 $ 460,000,000 3. Boeing 2006 2005 2004 a. Diluted earnings per common share $ $3.19 $2.24 b. Price/earnings ratio $ = 31.2 8 $70.24 = 22.02 $51.90 = 23.17 $ $3.19 $2.24 10 c. Percentage of earnings retained Net Income Before Nonrecurring Items – All Dividends Net Income Before Nonrecurring Items 2006 2005 2004 $2,206 – $956 $2,562 – $820 $1,820 – $648 $2,206 $2,562 $1,820 $1,250 $1,74 2 $1,17 2 $2,206 $2,56 2 $1,82 56.66% 67.99 % 64.40 % d. Dividend Payout Dividends Per Common Share Diluted Earnings Per Share Before Nonrecurring Items 2006 200 5 200 4 $1.25 $1. 05 $.8 5 $2.84 $3. 19 $2. 24 $.44 $.3 3 $.3 8 e. Dividend Yield Dividends Per Common Share Market Price Per Common Share 2006 2005 2004 $1.25 $1.0 5 $.85 $88.84 $70. 24 $51. 90 1.41% 1.49 1.64 11 % % 12 4. 2006 2005 a. Total assets $215,666,000 $172,759,000 b. Shareholders’ equity $161,145,000 $81,012,000 c. Common stock shares issued and outstanding 15,734,000 12,789,000 d. Total capitalization Shares issued and outstanding (a) 15,734,000 12,789,000 Market price (b) $31.59 $16.95 (a) x (b) = $49,703,706 $21,677,355 e. Total shareholders’ equity represents the book amount. Capitalization is equal to shares issued and outstanding multiplied by the market price per share. 13 QUESTIONS 9- 1. Earnings per share is the amount of income earned on a share of common stock during an accounting period....
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This note was uploaded on 01/11/2012 for the course ACCOUNTING 203 taught by Professor Choi during the Spring '09 term at NYU.

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Chapter 9 Solutions - Chapter 9 For the Investor TO THE NET...

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