Question

The firm will pay an annual dividend this year of $2 per share. the current market price of the stock is $40.00 per share. the book value of this stock is $24.00 per share. the earnings per share for this firm is $5.75. what is the current dividend yield of this stock?

Answer 1

5%

Step-by-step explanation:

In this question, we have to find out the dividend yield which is shown below:

Dividend yield = (Annual dividend ÷ current market price) × 100

where,

Market price = $40 per share

Annual dividend = $2 per share

So, the dividend yield = ($2 per share ÷ $40 per share) × 100

= 5%

All other information which is given is not relevant. Hence, ignored it