Mason Manufacturing had 2012 earnings of $850,000.Cash dividends per share were $1.25.The company had an average of 350,000 shares of common stock outstanding.The market price of the stock at the end of the year was $30 per share.What was the dividend-yield for Mason Manufacturing?

Question

Quizplus · Accepted Answer

Dividend-yield is the ratio of annual dividends per share to the market price per share. 
The annual dividends per share for Mason Manufacturing = $1.25 
The market price per share = $30 
Therefore, the dividend-yield = Annual dividends per share / Market price per share 
Dividend-yield = $1.25 / $30 = 0.0417 or 4.17% (rounded to two decimal places). Thus, the correct answer is choice A.

Mason Manufacturing Had 2012 Earnings of $850,000