A company’s share capital consists of 2,800,000 ordinary shares of 25 pence each. During its last financial year the company paid a dividend of 8 pence per share. The market price of the shares is currently £1.75. Calculate the dividend yield correct to one decimal place.

A company’s share capital consists of 2,800,000 ordinary shares of 25 pence each. During its last financial year the company paid a dividend of 8 pence per share. The market price of the shares is currently £1.75. Calculate the dividend yield correct to one decimal place.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 14P

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Question

A company’s share capital consists of 2,800,000 ordinary shares of 25 pence each.
During its last financial year the company paid a dividend of 8 pence per share.
The market price of the shares is currently £1.75.
Calculate the dividend yield correct to one decimal place.

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