The market value of the companys common stock

Question

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or preferred stock during the year. A total of 700 thousand shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $1.00. The market value of the company's common stock at the end of the year was $22. All of the company's sales are on account.

Heritage Antiquing Services Comparative Balance Sheet (dollars in thousands)
	This Year			Last Year
Assets
Current assets:
Cash	$	1,190		$	1,290
Accounts receivable, net		9,200			7,800
Inventory		13,700			11,400
Prepaid expenses		700			650
Total current assets		24,790			21,140
Property and equipment:
Land		9,600			9,600
Buildings and equipment, net		41,306			35,878
Total property and equipment		50,906			45,478
Total assets	$	75,696		$	66,618
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	20,300		$	18,900
Accrued payables		1,040			850
Notes payable, short term		170			170
Total current liabilities		21,510			19,920
Long-term liabilities:
Bonds payable		8,700			8,700
Total liabilities		30,210			28,620
Stockholders' equity:
Preferred stock		1,000			1,000
Common stock		700			700
Additional paid-in capital		4,000			4,000
Total paid-in capital		5,700			5,700
Retained earnings		39,786			32,298
Total stockholders' equity		45,486			37,998
Total liabilities and stockholders' equity	$	75,696		$	66,618

Heritage Antiquing Services Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year			Last Year
Sales	$	69,000		$	64,000
Cost of goods sold		37,000			41,000
Gross margin		32,000			23,000
Selling and administrative expenses:
Selling expenses		10,500			11,000
Administrative expenses		6,900			6,600
Total selling and administrative expenses		17,400			17,600
Net operating income		14,600			5,400
Interest expense		870			870
Net income before taxes		13,730			4,530
Income taxes		5,492			1,812
Net income		8,238			2,718
Dividends to preferred stockholders		50			360
Net income remaining for common stockholders		8,188			2,358
Dividends to common stockholders		700			700
Net income added to retained earnings		7,488			1,658
Retained earnings, beginning of year		32,298			30,640
Retained earnings, end of year	$	39,786		$	32,298
Required: Compute the following financial ratios for common stockholders for this year: 1. Gross margin percentage. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)   Gross margin percentage % 2. Earnings per share of common stock. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)   Earnings $  per share 3. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)   Price-earnings ratio    4. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place. Omit the "%" sign in your response.)   Dividend payout ratio % 5. Dividend yield ratio. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)   Dividend yield ratio % 6. Return on total assets. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)   Return on total assets % 7. Return on common stockholders' equity. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)   Return on common stockholders' equity % 8. Book value per share. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)   Book value $  per share