42.1k views
0 votes
The stock of Pills Berry Company is currently selling at $90 per share. The firm pays a dividend of $2.75 per share. a. What is the annual dividend yield? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) b. If the firm has a payout rate of 40 percent, what is the firm’s P/E ratio? (Do not round intermediate calculations and round your answer to 2 decimal places.)

User TrueDub
by
5.1k points

1 Answer

6 votes

Answer:

a. 3.06%

b. 13.04

Explanation:

The computation is shown below:-

a. Annual dividend yield = Annual dividend ÷ Current stock price

= $2.75 ÷ $90

= 3.06%

b. P/E ratio = Market price ÷ Earning per share

= $90 ÷ $6.9

= 13.04

where, EPS = $2.75 ÷ 40%

= $6.9

We simply applied the above formula and the same is to be considered

so that the correct answer could come

User Navid Zarepak
by
5.4k points