Question

Ridgewood Company has 25,000 shares of cumulative 2% preferred stock, $50 par and 150,000 shares of $25 par common stock. During the current year, $62,500 was distributed as dividends. Determine the numerator in the dividend yield calculation. a.$0.25

Answer 1

$0.25

Step-by-step explanation:

25,000 shares x 2% x $50 preferred stocks = $25,000

150,000 x $25 common stocks

$62,500 - $25,000 = $37,500

$37,500 / 150,000 shares = $0.25 per share

dividend yield = $0.25 / $25 = 1%

Dividend yield measures the amount of money paid to stockholders based on the cash dividends per share divided by share price.