You have just looked up the stock quotation for Premier Images, Inc. in the Wall Street Journal . The PE ratio is listed as 20. The dividend is shown as $1.00, and the stock just closed (last)at $42.00. What are the yield % and the earnings per share (EPS)for Premier Images, Inc.?

Question

Quizplus · Accepted Answer

To calculate the yield %, we divide the annual dividend by the current stock price and multiply by 100. So, the yield % for Premier Images, Inc. is:

Yield % = (Annual Dividend/Current Stock Price) x 100
Yield % = ($1.00/$42.00) x 100
Yield % = 2.38% or 2.4% (rounded off)

To calculate the earnings per share (EPS), we divide the current stock price by the PE ratio. So, the EPS for Premier Images, Inc. is:

EPS = Current Stock Price/PE Ratio
EPS = $42.00/20
EPS = $2.10

Therefore, the answer is A) Yield = 2.4%; EPS = $2.10.

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