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During 2022, Amazing Corp.reported after-tax net income of $900,000 and paid $175,000 in common dividends.The weighted average number of common shares issued in 2022 was 200,000.There are no preferred shares issued.At year end, Amazing's common shares are selling for $81 per share on the Toronto Stock Exchange.
-Amazing's dividend yield for 2022 is
A)$0.875.
B)1.1%.
C)6.0%.
D)16.7%.

Question

Use the following information for questions 
During 2022, Amazing Corp.reported after-tax net income of $900,000 and paid $175,000 in common dividends.The weighted average number of common shares issued in 2022 was 200,000.There are no preferred shares issued.At year end, Amazing's common shares are selling for $81 per share on the Toronto Stock Exchange.
-Amazing's dividend yield for 2022 is
A)$0.875.
B)1.1%.
C)6.0%.
D)16.7%.

Quizplus · Accepted Answer

Dividend yield is calculated as (Annual Dividends per Share / Price per Share) * 100. Here, the annual dividends per share is $175,000 / 200,000 shares = $0.875 per share. The price per share is $81. So, the dividend yield is ($0.875 / $81) * 100 = 1.08%, which rounds to 1.1%.

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