Financial Accounting: An Integrated Statements Approach, 2nd Edition

Accumulated

Additional Other

Common Preferred Paid-In Comprehensive Retained

(in 000,000s) Stock Stock Capital Income Earnings Total

Net earnings $ 6,481 $ 6,481

Dividends to:

Common shareholders (2,408) (2,408)

Preferred shareholders (131) (131)

Treasury purchases $(80) $ 33 (4,023) (4,070)

Common stock issuances

(option plan) 23 711 734

Other comprehensive income $461 461

a. For all items except net earnings and other comprehensive income, identify the disclosure

location, amount, and direction (inflow or outflow) on the statement of cash flows.

b. Determine the dividend payout ratio. Round percentage to one decimal place.

c. Determine the comprehensive income (loss).

The Wall Street Journalreported the following stock exchange information for General Electric

Co.on January 18, 2005:

YTD 52 Weeks

% CHG Hi Lo Stock Sym Div Yld% PE Vol 100s LAST Net Chg

1.5 3775 2888 GenElec GE .88 2.4 24 198977 3596 +0.44

a. If you owned 500 shares of GE, what amount would you receive as a quarterly dividend?

b. Calculate and prove the dividend yield. Round to two decimal places.

c. What is GE’s percentage change in market price from the January 17, 2005, close? Round

to two decimal places.

d. What was the price of GE common stock at the beginning of the first trading day of the

year? (Hint:Use the YTD % CHG column and the current price.)

e. If you bought 500 shares of GE at the close price on January 18, 2005, how much would it

cost, and who gets the money?

At the market close of January 19, 2005, Bank of America Corp.had a closing stock price of

$44.97. In addition, Bank of America had earnings per share of $3.76 and dividend per share was

$1.80. Determine Bank of America’s (a) dividend yield and (b) dividend payout ratio. Round

percentages to one decimal place.

General Motors Corporationhad earnings per share of $5.62 for 2003 and $4.95 for 2004. In ad-

dition, the dividend was $2.00 per share during these two years. The market price for GM closed

at $40.17 per share on December 31, 2004.

a. Determine the dividend yield for General Motors on December 31, 2004. Round percent-

ages to two decimal places.

b. Determine the 2003 and 2004 dividend payout ratio for General Motors. Round percent-

ages to one decimal place.

c. Interpret these measures.

522 Chapter 11 Stockholders’ Equity: Capital Stock and Dividends

Exercise 11-24

Interpret stock exchange

listing

Goals2, 9

a. $110

Exercise 11-25

Dividend yield and dividend

payout ratio

Goal 9

Exercise 11-26

Dividend yield and dividend

payout ratio

Goal 9