The following information pertains to TQM company for year-end 2016.
Earnings before interest and taxes = P 3,000,000
Capital structure consists of the following:
Debts – 1,000 , 15%, P 5,000 value per bond,
Preferred Shares – 12%, 5,000, P1000 par
Ordinary equity shares – 10,000 shares , P100 par
Corporate Tax rate – 32%
For 2016, 60% of Earnings after interest and taxes will be distributed as dividends.
Assume that interest, taxes, dividends are paid annually.
A. Compute for the EAIT. P_____
B.. Compute for the dividends for common shares.
Common Shares= P____