Excerpts from Stys Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $50 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $8.20 per share.
-The dividend yield ratio for Year 2 is closest to:
A) 6.10%
B) 83.33%
C) 7.32%
D) 1.22%

Question

Excerpts from Stys Corporation's most recent balance sheet and income statement appear below:  Dividends on common stock during Year 2 totaled $50 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $8.20 per share.
-The dividend yield ratio for Year 2 is closest to:
A) 6.10% 
B) 83.33% 
C) 7.32% 
D) 1.22%

Quizplus · Accepted Answer

The dividend yield ratio is calculated by dividing the annual dividend per share by the current market price per share. In this case, the annual dividend per share is $0.60 and the current market price per share is $9.84. Therefore, the dividend yield ratio is $0.60/$9.84 = 0.0610, or 6.10%.

Excerpts from Stys Corporation's Most Recent Balance Sheet and Income