Draiman, Inc., has sales of $598,000, costs of $260,000, depreciation expense of $64,500, interest expense of $31,500, and a tax rate of 40 percent. The firm paid out $42,500 in cash dividends and has 53,000 shares of common stock outstanding. (Enter your answer as directed, but do not round intermediate calculations.) Requirement 1: What is the earnings per share figure? (Round your answer to 2 decimal places (e.g., 32.16).) Earnings per share $ Requirement 2: What is the dividends per share figure? (Round your answer to 2 decimal places (e.g., 32.16).) Dividends per share $ Explanation: The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to get taxable income, and then subtract taxes to arrive at net income. Doing so, we get: Income statement Sales $ 598,000 Costs 260,000 Depreciation 64,500 EBIT $ 273,500 Interest 31,500 Taxable income $ 242,000 Taxes (40%) 96,800 Net income $ 145,200 Earnings per share is the net income divided by the shares outstanding, so: EPS = Net income / Shares outstanding EPS = $145,200 / 53,000 EPS = $2.74 per share And dividends per share are the total dividends paid divided by the shares outstanding, so: DPS = Dividends / Shares outstanding DPS = $42,500 / 53,000 DPS = $0.80 per share

Draiman, Inc., has sales of $598,000, costs of $260,000, depreciation expense of $64,500, interest expense of $31,500, and a tax rate of 40 percent. The firm paid out $42,500 in cash dividends and has 53,000 shares of common stock outstanding. (Enter your answer as directed, but do not round intermediate calculations.)

Requirement 1:

What is the earnings per share figure? (Round your answer to 2 decimal places (e.g., 32.16).)

Earnings per share

$

Requirement 2:

What is the dividends per share figure? (Round your answer to 2 decimal places (e.g., 32.16).)

Dividends per share

$

Explanation:

The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to get taxable income, and then subtract taxes to arrive at net income. Doing so, we get:

Income statement
Sales	$	598,000
Costs		260,000
Depreciation		64,500
EBIT	$	273,500
Interest		31,500
Taxable income	$	242,000
Taxes (40%)		96,800
Net income	$	145,200

Earnings per share is the net income divided by the shares outstanding, so:

EPS = Net income / Shares outstanding

EPS = $145,200 / 53,000

EPS = $2.74 per share

And dividends per share are the total dividends paid divided by the shares outstanding, so:

DPS = Dividends / Shares outstanding

DPS = $42,500 / 53,000

DPS = $0.80 per share