Dividend YieldLos Altos, Inc., disclosed the following information in a recent annual report: Year 1Year 2Net income$47,250$72,600Preferred stock dividends4,0503,960Average common stockholders’ equity1,584,0002,025,000Dividend per common share1.581.62Earnings per share2.572.71Market price per common share, year-end26.3027.70Calculate the common stock dividend yield for Los Altos, Inc. for both years.Round to one decimal. Year 1Year 2Common stock dividend yield Did the dividend yield improve from Year 1 to Year 2? Answer

Common stock dividend yield = Dividend / Price Year 1 = $1.58 / $26.30 = 0.06007 or 6.0% Year 2 =…

Answered: Dividend Yield Los Altos, Inc.,…

Managerial Accounting: The Cornerstone of Business Decision-Making

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ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

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Dividend Yield

Los Altos, Inc., disclosed the following information in a recent annual report:

	Year 1	Year 2
Net income	$47,250	$72,600
Preferred stock dividends	4,050	3,960
Average common stockholders’ equity	1,584,000	2,025,000
Dividend per common share	1.58	1.62
Earnings per share	2.57	2.71
Market price per common share, year-end	26.30	27.70

Calculate the common stock dividend yield for Los Altos, Inc. for both years.
Round to one decimal.

	Year 1	Year 2
Common stock dividend yield

Did the dividend yield improve from Year 1 to Year 2? Answer

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