Price-Earnings Ratio; Dividend Yield The table that follows shows the stock price, earnings per share, and dividends per share for three companies for a recent year: Earnings Dividends Price per Share per Share Deere & Company $135.44 $7.34 $2.58 Alphabet 1,035.61 44.22 0.00 The Coca-Cola Company 47.35 1.58 1.56 a. Determine the price-earnings ratio and dividend yield for the three companies. Round your answers to one decimal place. If an amount should be zero, enter in "0". Price-Earnings Ratio Dividend Yield Deere & Company % Alphabet % The Coca-Cola Company % b. Explain the differences in these ratios across the three companies by completing the following: Deere & Company has the v price-earnings ratio, and is expected to produce shareholder returns through Coca-Cola has both a dividend yield and price-earnings ratio. Alphabet pays dividend and, thus, has dividend yield. However, Alphabet has the second price-earnings rati of the three companies.
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
Please assist me with the questions.
options for B:
(first blank) lowest/highest
(second blank) a combination of some share price appreciation and a moderate dividend/price appreciation only
(third blank) high/low
(fourth blank) a low/no
(fifth blank) a low/no
(sixth blank) lowest/largest
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