Shares of my company sells for $20 per share

Business Sep 17, 2020

Shares of my company sells for $20 per share. 40% of earnings are paid in dividends. What is the dividend yield? Earnings are $100,000 and there are 10,000 shares of stock outstanding. Explain?

Expert Solution

Total amount paid as dividend: 40% of 100000= 40,000
Dividend per share: 40000/10000 shares= 4 per share.

Dividend yield: 4/20= 20%

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