Question

The Hummel Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. End of current year End of prior year Net sales revenue (all credit) $800,000 Cost of goods sold $504,000 Gross profit $296,000 Selling general expenses $184,000 Interest expense $32,000 Net income $80,000 Current assets $71,000 $20,000 Long-term assets $329,000 $280,000 Total assets $400,000 $300,000 Current liabilities $56,000 $16,000 Lano-term liabilities &A Ann $164 non Common stockholders' equity $260,000 $400,000 Total liabilities and stockholders' equity $120,000 $300,000 Inventory and prepaid expenses account for $28,000 of the current year's current assets. Average inventory for the current year is $12,000. Average net accounts receivable for the current year is $32,000. There are 20,000 shares of common stock outstanding Total dividends paid during the current year were $100,000. The market price per share of common stock is $25. What is the company's dividend yield for the current year? (A) 20.00% (B) 14.20% (C) 16.00% (D) 80.00%

Answer 1

What is the company's dividend yield for the current year?

(A) 20.00%

Step-by-step explanation:

The Dividend Yield shows the return on investment for a stock but not consider the capital gain of that stock.

It's financial ratio shows how much the company pays in divdend related to the stock price.

It's calculated by dividing the dólar per share paid in dividends by the value of the stock´s price.

In this case the dividend per share it's : $100,000 / 20.000 = $5 and the stock Price it's $25, so the dividend yield it's $5 / $25 = 20%