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During 2013, Pattar Corp reported after-tax profit of $450,000 and paid $75,000 in common dividends. The weighted average number of common shares issued in 2013 was 150,000. There are no preferred shares issued. At year end, Pattar's common shares are selling for $60 per share on the Toronto Stock Exchange.
-Pattar's dividend yield for 2013 is
A)$0.50.
B)0.8%.
C)6.0%.
D)16.7%.

Question

Use the following information for questions 
During 2013, Pattar Corp reported after-tax profit of $450,000 and paid $75,000 in common dividends. The weighted average number of common shares issued in 2013 was 150,000. There are no preferred shares issued. At year end, Pattar's common shares are selling for $60 per share on the Toronto Stock Exchange.
-Pattar's dividend yield for 2013 is
A)$0.50.
B)0.8%.
C)6.0%.
D)16.7%.

Quizplus · Accepted Answer

Dividend yield = (dividends per share / market price per share) x 100%

Dividends per share = common dividends / weighted average number of common shares issued
                     = $75,000 / 150,000
                     = $0.50

Market price per share = $60

Dividend yield = ($0.50 / $60) x 100%
                   = 0.8%

Use the Following Information for Questions