Which of the following statements is correct?
A)The dividend yield and earnings per share both have the same denominator.
B)The dividend yield and earnings per share both have the same numerator.
C)Dividends per share are used in calculating both the earnings per share and the dividend yield.
D)Net income is used in calculating the earnings per share but not in calculating the dividend yield.

Question

Quizplus · Accepted Answer

Net income is a component of the earnings per share (EPS) calculation, where EPS = Net Income / Number of Shares Outstanding. Dividend yield, on the other hand, is calculated using the annual dividends per share divided by the stock's price per share, not involving net income directly.

Which of the Following Statements Is Correct