Sperle Corporation has provided the following data concerning its stockholders' equity accounts:
Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share.
-The company's dividend yield ratio for Year 2 is closest to:
A) 21.1%
B) 2.6%
C) 1.6%
D) 14.7%

Question

Sperle Corporation has provided the following data concerning its stockholders' equity accounts:
  Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share.
-The company's dividend yield ratio for Year 2 is closest to:
A) 21.1% 
B) 2.6% 
C) 1.6% 
D) 14.7%

Quizplus · Accepted Answer

Dividend yield ratio = Dividends per share* ÷ Market price per share
= $0.08 ÷ $3.08 = 2.60% (rounded)
*Dividends per share = Common dividends ÷ Common shares (see above)
= $6,400 ÷ 80,000 shares = $0.08 per share (rounded)

Sperle Corporation Has Provided the Following Data Concerning Its Stockholders