Main Street Company paid out $2.30 in dividends per share of common stock and had earnings per share of $5.00 during 2014. The market price of the stock on December 31, 2014 was $21.00 per share. There were 15,000 shares of stock outstanding for the entire year. The dividend yield as of December 31, 2014 is closest to:

Question

Quizplus · Accepted Answer

Dividend per share = $2.30
Earnings per share = $5.00

Dividend payout ratio= $2.30/$5.00=0.46=46%

Market value per share= $21.00

Dividend yield= ($2.30/$21) x 100= 10.95%

Main Street Company Paid Out $2