Sperle Corporation has provided the following data concerning its stockholders' equity accounts: Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share.The company's dividend yield ratio for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) 21.1%
B) 2.6%
C) 1.6%
D) 14.7%

Question

Sperle Corporation has provided the following data concerning its stockholders' equity accounts:  Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400. The market price of common stock at the end of Year 2 was $3.08 per share.The company's dividend yield ratio for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) 21.1% 
B) 2.6% 
C) 1.6% 
D) 14.7%

Quizplus · Accepted Answer

Dividend yield ratio = Dividend per share / Market price per share
Dividend per share = Dividends on common stock / Total number of common shares
Dividend per share = $6,400 / 2,000 = $3.20
Market price per share = $3.08
Dividend yield ratio = $3.20 / $3.08 = 1.04 = 2.6% (rounded to 2 decimal places)

Sperle Corporation Has Provided the Following Data Concerning Its Stockholders