Imagine you are working for Drexel Morgan Bank, and you are assigned with the task of evaluating Earl Grey, Inc. Consider the following financial information of this company.

Imagine you are working for Drexel Morgan Bank, and you are assigned with the task of evaluating Earl Grey, Inc. Consider the following financial information of this company.

Consider the following information about Earl Grey, Inc.

Total assets $250 million
Total debt $110 million
Preferred stock $ 35 million
Common stockholders’ equity $105 million
Net profits after taxes $25.5 million
Number of preferred stock outstanding 1.5 million shares
Number of common stock outstanding 9 million shares
Preferred dividends paid $2.5 per share
Common dividends paid $0.70 per share
Market price of the preferred stock $32.55 per share
Market price of the common stock $26.00 per share
Use the information above to find the following.

The company’s book value
Its book value per share
The stock’s earnings per share (EPS)
The dividend payout ratio
The dividend yield on the common stock
The dividend yield on the preferred stock
Directions:

You will report the ratios and your analysis in a Word document.
Your analysis should include a discussion of the strengths or weaknesses revealed in each ratio.
All six ratios should be discussed.

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