Beaufort Corp. stock currently sells for $50. The dividend yield is 4% and the dividend payout ratio is 25%. The dividend is_____ and the earnings per share are ______.

Question

Quizplus · Accepted Answer

The dividend yield is calculated as the annual dividend per share divided by the stock price. A 4% yield on a $50 stock is $2.00 ($50 * 4% = $2.00). The dividend payout ratio is the percentage of earnings paid to shareholders in dividends. At a 25% payout ratio, if $2.00 represents 25% of earnings, then the earnings per share are $8.00 ($2.00 / 25% = $8.00).