A company reports basic earnings per share of $3.50, cash dividends per share of $0.75 and a market price per share of $64.75. The company's dividend yield equal is equal to 21.4%.

Question

Quizplus · Accepted Answer

Dividend yield is calculated as dividends per share divided by market price per share, expressed as a percentage. Using the numbers given in the question:
Dividend yield = ($0.75/$64.75) x 100% = 1.16%
Therefore, the statement "The company's dividend yield is equal to 21.4%" is false.

A Company Reports Basic Earnings Per Share of $3