The following were reflected from the records of Bulldogs Inc.: Earnings before interest and taxes Interest expense Preferred dividends P1,250,000 250,000 200,000 40% Payout ratio Income tax rate 25% Price earnings ratio Shares outstanding throughout the year: 5 times Preferred 20,000 Common 25,000

The following were reflected from the records of Bulldogs Inc.: Earnings before interest and taxes Interest expense Preferred dividends P1,250,000 250,000 200,000 40% Payout ratio Income tax rate 25% Price earnings ratio Shares outstanding throughout the year: 5 times Preferred 20,000 Common 25,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

Question

The dividend yield ratio is:

A. 0.12

B. 0.08

C. none of the choice is correct

D. 0.40

E. 0.50

The following were reflected from the records of Bulldogs Inc.:
Earnings before interest and taxes
Interest expense
Preferred dividends
P1,250,000
250,000
200,000
40%
Payout ratio
Income tax rate
25%
Price earnings ratio
Shares outstanding throughout the year:
5 times
Preferred
20,000
Common
25,000

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