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 equals 21.4%.
$0.75/$64.75 = 1.16%

Question

Quizplus · Accepted Answer

The dividend yield is calculated by dividing the cash dividends per share by the market price per share and then multiplying by 100.

In this case, (0.75/64.75) x 100 = 1.16%.

Therefore, the statement that the company's dividend yield is 21.4% is false.

A Company Reports Basic Earnings Per Share of $3