Financial information for KTM Corporation (www.KTM.com) follows:
Net income (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . 20,818
Cash dividends declared (in thousands) . . . . . . . . . . . . . . 0
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . 0.00
Number of shares outstanding (in thousands) . . . . . . . . . 10,509
Equity applicable to shares (in thousands) . . . . . . . . . . . . 219,775
Assume that for KTM the year end number of shares outstanding approximates the weighted average shares outstanding.
Required:
1. Compute book value per share for KTM.
2. Compute earnings per share (EPS) for KTM.
3. Compare KTM's dividends per share with its EPS. Is KTM paying out a large or small amount of its income as dividends? Explain.