Financial statements for Larned Company appear below: Dividends during Year 2 totaled $263 thousand, of which $12 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $160.

-Larned Company's dividend yield ratio on December 31,Year 2 was closest to:
A)8.7%
B)9.1%
C)8.3%
D)5.5%

Question

Financial statements for Larned Company appear below:   Dividends during Year 2 totaled $263 thousand, of which $12 thousand were preferred dividends.
The market price of a share of common stock on December 31, Year 2 was $160.

-Larned Company's dividend yield ratio on December 31,Year 2 was closest to:
A)8.7% 
B)9.1% 
C)8.3% 
D)5.5%

Quizplus · Accepted Answer

Number of common shares outstanding = Common stock F1F1F1S1F1F1F10 Par value
= $180 F1F1F1S1F1F1F10 $10 per share = 18 shares
Dividends per share = Common dividends F1F1F1S1F1F1F10 Common shares
= ($263 - $12)F1F1F1S1F1F1F10 18 shares = $13.94 per share
Dividend yield ratio = Dividends per share F1F1F1S1F1F1F10 Market price per share
= $13.94 per share F1F1F1S1F1F1F10 $160 per share = 8.7%

Financial Statements for Larned Company Appear Below: Dividends