Cameron Company had 50,000 common shares issued and outstanding during the year just ended.The following information pertains to these shares:

$\begin{array}{lccc}
\text { Price Originally Issued }& \$ 40 \
\text { Book Value at End of Current Year }&\$70 \
\text { Market Value, Beginning of Current Year }&\$ 85\
\text {
Market Value, End of Current Year }&\$90 \
\end{array}$
The total dividend on common shares for the year was $400,000.What was Cameron Company's dividend yield ratio for the year?

Question

Cameron Company had 50,000 common shares issued and outstanding during the year just ended.The following information pertains to these shares:

$\begin{array}{lccc}
\text { Price Originally Issued }& \$ 40 \
\text {  Book Value at End of Current Year  }&\$70 \
\text {   Market Value, Beginning of Current Year  }&\$ 85\
\text { 
Market Value, End of Current Year }&\$90 \
\end{array}$
 The total dividend on common shares for the year was $400,000.What was Cameron Company's dividend yield ratio for the year?

Quizplus · Accepted Answer

The dividend yield ratio is calculated as (Annual Dividends per Share / Market Value per Share at End of Year) * 100. Here, the dividend per share is $400,000 / 50,000 = $8. The market value per share at the end of the year is $90. So, the dividend yield ratio is ($8 / $90) * 100 = 8.89%.

Cameron Company Had 50,000 Common Shares Issued and Outstanding During