Commons,Inc.provides the following information for 2018: $$\begin{array} { | l | r | }
\hline \text { Net income } & \$ 32,000 \
\hline \text { Market price per share of common stock } & \$ 19 / \text { share } \
\hline \text { Dividends paid } & \$ 0.75 / \text { share } \
\hline \text { Common stock outstanding at Jan. } 1,2018 & 110,000 \text { shares } \
\hline \text { Common stock outstanding at Dec. } 31,2018 & 165,000 \text { shares } \
\hline
\end{array}$$ The company has no preferred stock outstanding.Calculate the dividend yield for common stock.(Round your answer to two decimal places.)
A) 3.95%
B) 1.21%
C) 2.74%
D) 4.11%

Question

Commons,Inc.provides the following information for 2018: $$\begin{array} { | l | r | } 
\hline \text { Net income } & \$ 32,000 \
\hline \text { Market price per share of common stock } & \$ 19 / \text { share } \
\hline \text { Dividends paid } & \$ 0.75 / \text { share } \
\hline \text { Common stock outstanding at Jan. } 1,2018 & 110,000 \text { shares } \
\hline \text { Common stock outstanding at Dec. } 31,2018 & 165,000 \text { shares } \
\hline
\end{array}$$ The company has no preferred stock outstanding.Calculate the dividend yield for common stock.(Round your answer to two decimal places.)
A) 3.95%
B) 1.21%
C) 2.74%
D) 4.11%

Quizplus · Accepted Answer

The dividend yield is calculated by dividing the annual dividend per share by the market price per share. In this case, the annual dividend per share is $0.75 and the market price per share is $19. Therefore, the dividend yield is $0.75/$19 = 3.95%.

Commons,Inc The Company Has No Preferred Stock Outstanding