(a)
Compute the earnings per share for year ended after and before purchase of
Compute the return on common
Compute the return on assets ratio for year ended after and before purchase of treasury stock.
Discuss the change in the company’s profitability over this period.
(b)
Compute the payout ratio for year ended after and before purchase of treasury stock.
Compute the average cash dividend paid per share for year ended after and before purchase of treasury stock.
Discuss the change in these ratios during this period and the implications for the company’s dividend policy.
(c)
Compute the debt to assets ratio for year ended after and before purchase of treasury stock.
Compute the times interest earned ratio for year ended after and before purchase of treasury stock.
Discuss the change in company’s solvency.
(d)
Discuss to what extent the increased reliance on debts changes in the return on common stockholders’ equity.
(e)
Explain whether the purchase of treasury stock and the reliance on debt financing was a wise strategic move.
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