FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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| ny | Annual Cash Dividend per Share | Market Value per Share |
|||||
| 1 | $ | 11.00 | $ | 169.23 | |||
| 2 | 8.00 | 98.77 | |||||
| 3 | 7.30 | 72.28 | |||||
| 4 | 1.80 | 118.15 | |||||
Compute the dividend yield for each of these four separate companies.
Expert Solution
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Step 1
The financial ratio is one of the most important tools for analyzing a company’s financial statement. It has five types of ratios 1. Liquidity ratio 2. Solvency ratio 3. Turnover ratio 4. Profitability 5. Market ratios.
The dividend yield is one of the market financial ratios (dividend/price) that illustrates how much a firm pays out in dividends each year in proportion to the stock price. Dividend yields in utilities and consumer staples are frequently higher.
It is critical for investors to remember that greater dividend yields do not always imply appealing investment opportunities because a stock's dividend yield may be boosted as a result of a stock's performance.
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