Answer:
price earning ratio are 20:1
yield of stock is 2.5%
Explanation:
given data
earn = $2 per share
price treading = $40
dividend = $1
to find out
price-earnings ratio and yield on the stock
solution
we find here price earning ration by given formula that is
ratio = price treading / earning .....................1
put here value
ratio = 40 / 2
ratio = 20
so price earning ratio are 20:1
and
yield of stock is calculated as
yield of stock = dividend / price treading ...............2
put here value
yield of stock = 1/ 40
yield of stock = 0.025
so yield of stock is 2.5%