Pink Limited Purple Limited Earnings before interest and tax R3 000 000 R4 000 000 Long term interest bearing debt R500 000 R800 000 Earnings attributable to shareholders R2 124 000 R2 822 400 Tax rate 28% 28% Share Capital R2 00 000 R5 000 000 Number of ordinary shares issued 200 000 400 000 Number of ordinary shares authorised 1 000 000 500 000 Current market price of the share R30 R20.00 Dividend per share R5 R3 As a financial manager you are very concerned about the dividend yield and dividend payout ratio as these will be your indicators of the return on your investments. Q .3 Calculate the dividend yield for both companies.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Pink Limited Purple Limited
Earnings before interest and tax
R3 000 000 R4 000 000
Long term interest bearing debt
R500 000
R800 000
Earnings attributable to shareholders R2 124 000 R2 822 400
Tax rate
28%
28%
Share Capital
R2 00 000
R5 000 000
Number of ordinary shares issued
200 000
400 000
Number of ordinary shares authorised 1 000 000
500 000
Current market price of the share
R30
R20.00
Dividend per share
R5
R3
As a financial manager you are very concerned about the dividend yield and dividend payout ratio as these will be your indicators of the return on your
investments.
Q
.3 Calculate the dividend yield for both companies.
Transcribed Image Text:Pink Limited Purple Limited Earnings before interest and tax R3 000 000 R4 000 000 Long term interest bearing debt R500 000 R800 000 Earnings attributable to shareholders R2 124 000 R2 822 400 Tax rate 28% 28% Share Capital R2 00 000 R5 000 000 Number of ordinary shares issued 200 000 400 000 Number of ordinary shares authorised 1 000 000 500 000 Current market price of the share R30 R20.00 Dividend per share R5 R3 As a financial manager you are very concerned about the dividend yield and dividend payout ratio as these will be your indicators of the return on your investments. Q .3 Calculate the dividend yield for both companies.
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