Question: The Morton Company recently reported net profits after taxes of $10 million. It has 5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company's stock currently trades at $45 per share.
a. Compute the stock's earnings per share (EPS). Round the answer to two decimal places.
b. What's the stock's P/E ratio? Round the answer to two decimal places.
c. Determine what the stock's dividend yield would be if it paid $2.88 per share to common stockholders. Round the answer to two decimal places.