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The following information was available for the year ended December 31, 2022: Dividends per share 1.30 Earnings per share 3.00 Market price per share at year-end 26.70 Required: Calculate the price/earnings ratio for 2022. Note: Round your answer to 2 decimal places. Calculate the dividend payout ratio for 2022. Note: Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34). Calculate the dividend yield for 2022

User PyInTheSky
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Final answer:

The price/earnings ratio for 2022 is 8.90, the dividend payout ratio is 43.33%, and the dividend yield is 4.87%, demonstrating the stock's profitability and income return to shareholders.

Step-by-step explanation:

You have asked how to calculate the price/earnings ratio, the dividend payout ratio, and the dividend yield for the year ended December 31, 2022. Here are the calculations using the information provided:

  • Price/Earnings (P/E) Ratio: To calculate the P/E ratio, you divide the market price per share by the earnings per share (EPS). So, for 2022, the calculation would be "26.70 / 3.00", which gives a P/E ratio of approximately 8.90.
  • Dividend Payout Ratio: This ratio is calculated by dividing the dividends per share by the earnings per share. The calculation is "1.30 / 3.00", resulting in a dividend payout ratio of 43.33%.
  • Dividend Yield: To calculate the dividend yield, divide the dividends per share by the market price per share at year-end. The calculation is "1.30 / 26.70", resulting in a dividend yield of 4.87%.

These calculations are helpful for understanding a company's stock performance in terms of its profitability, how much income it returns to shareholders, and the yield of dividend income relative to stock price.

User Kineolyan
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