Final answer:
The given information indicates that the dividend yield decreased, the dividend payout ratio increased, the price-to-earnings ratio decreased, and the earnings yield increased.
Step-by-step explanation:
To determine the impact of the given information on the firm, we need to analyze the changes in earnings per share (EPS), dividends, and the share price. From the data provided, we know that the EPS increased from $10 to $12, the dividends increased from $4.00 to $4.80, and the share price increased from $80 to $90. Based on these changes:
- Dividend yield decreased: Dividend yield is calculated by dividing the dividends per share by the share price. As the dividends increased and the share price also increased, the dividend yield would decrease because the numerator (dividends) increased at a lesser rate than the denominator (share price).
- Dividend payout ratio increased: Dividend payout ratio is calculated by dividing the dividends per share by the EPS. As the dividends increased while the EPS also increased, the dividend payout ratio would increase as the numerator (dividends) increased at a faster rate than the denominator (EPS).
- Price-to-earnings ratio decreased: Price-to-earnings ratio is calculated by dividing the share price by the EPS. As the EPS increased and the share price increased, the price-to-earnings ratio would decrease because the numerator (share price) increased at a faster rate than the denominator (EPS).
- Earnings yield increased: Earnings yield is calculated by dividing the EPS by the share price. As the EPS increased and the share price increased, the earnings yield would increase because the numerator (EPS) increased at a faster rate than the denominator (share price).