Financial statements for Orange Company appear below: Dividends during Year 2 totaled $156 thousand, of which $18 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $100.

-Orange Company's dividend yield ratio on December 31,Year 2 was closest to:
A)3.1%
B)1.1%
C)3.5%
D)2.7%

Question

Financial statements for Orange Company appear below:   Dividends during Year 2 totaled $156 thousand, of which $18 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $100.

-Orange Company's dividend yield ratio on December 31,Year 2 was closest to:
A)3.1% 
B)1.1% 
C)3.5% 
D)2.7%

Quizplus · Accepted Answer

Number of common shares outstanding = Common stock F1F1F1S1F1F1F10 Par value
= $220 F1F1F1S1F1F1F10 $5 per share = 44 shares
Dividends per share = Common dividends F1F1F1S1F1F1F10 Common shares
= ($156 - $18)F1F1F1S1F1F1F10 44 shares = $3.14 per share
Dividend yield ratio = Dividends per share F1F1F1S1F1F1F10 Market price per share
= $3.14 per share F1F1F1S1F1F1F10 $100 per share = 3.1%

Financial Statements for Orange Company Appear Below: Dividends