La Paz Restaurants Selected data from the company's financial statements are presented below:
$\begin{array}{ll}
& \underline { 2015 }& \underline { 2014 }\
\text { Net income } &\$ 110,000 & \$ 123,000 \
\text {Cash dividends paid on common stock } &\$ 21,000 & \$ 38,000 \
\text { Year-end market price per share of common stock } &\$ 12.00 & \$ 13.00 \
\
\text { Shares of common stock outstanding } &140,000 & 140,000
\end{array}$
-Refer to the information presented above for La Paz Restaurants.The 2015 dividend yield ratio is reported as

Question

La Paz Restaurants Selected data from the company's financial statements are presented below:
$\begin{array}{ll}
& \underline {   2015  }& \underline {  2014   }\
\text { Net income } &\$ 110,000 & \$ 123,000 \
\text {Cash dividends paid on common stock  } &\$ 21,000 & \$ 38,000 \
\text { Year-end market price per share of common stock } &\$ 12.00 & \$ 13.00 \
\
\text { Shares of common stock outstanding } &140,000 & 140,000
\end{array}$ 
-Refer to the information presented above for La Paz Restaurants.The 2015 dividend yield ratio is reported as

Quizplus · Accepted Answer

The dividend yield ratio is calculated as (Dividends per share / Market price per share). For 2015, dividends per share = $21,000 / 140,000 = $0.15. The market price per share is $12.00. Thus, the dividend yield ratio = ($0.15 / $12.00) * 100% = 1.25%.

La Paz Restaurants Selected Data from the Company's Financial Statements