The assets of a managed fund are $25 million. The liabilities are $4 million. If the fund has 700 000 shares outstanding and pays a $3 dividend, what is the dividend yield?

Question

Quizplus · Accepted Answer

First, we need to calculate the net asset value (NAV) per share:

NAV per share = (Assets - Liabilities) / Number of shares outstanding 
= ($25 million - $4 million) / 700,000 
= $32.14

Next, we can calculate the dividend yield:

Dividend yield = (Dividend per share / NAV per share) x 100% 
= ($3 / $32.14) x 100% 
= 9.33%

Therefore, the closest option is B: 10%.

The Assets of a Managed Fund Are $25 Million