The Phibbs Company paid total cash dividends of $175,000 on 35,000 outstanding common shares. On the most recent trading day, the common shares sold at $90. What is this company's dividend yield?

Question

Quizplus · Accepted Answer

Dividend yield = (Annual dividend per share / Market price per share) x 100%
Annual dividend per share = (Total cash dividends / Number of outstanding common shares)
Annual dividend per share = ($175,000 / 35,000)
Annual dividend per share = $5

Market price per share = $90
Dividend yield = ($5 / $90) x 100%
Dividend yield = 5.56%

The Phibbs Company Paid Total Cash Dividends of $175,000 on 35,000