Cameron Corporation had 50,000 shares of common stock issued and outstanding that it originally issued for $40 per share. The following information pertains to these shares: $\begin{array}{ll}
\text { Book value at end of current year } & \$ 70 \
\text { Market value, beginning of current year} & \$ 85 \
\text { Market value, end of current year } & \$ 90
\end{array}$ The total dividend on common stock for the year was $400,000. Cameron Corporation's dividend yield ratio for the year was:
A)20.00%
B)11.43%
C)9.41%
D)8.89%

Question

Quizplus · Accepted Answer

The dividend yield ratio is calculated as the annual dividends per share divided by the market value per share at the end of the year. The dividends per share are $400,000 / 50,000 = $8. The market value at the end of the year is $90. Thus, the dividend yield ratio is $8 / $90 = 8.89%.

Cameron Corporation Had 50,000 Shares of Common Stock Issued and Outstanding