Concept explainers
a.
To calculate: The annual dividend yield of Pills Berry Company.
Introduction:
Annual dividend yield:
Also termed as the dividend price ratio, the ratio that helps in comparing the annual dividend of a company to its share price is termed as the annual dividend yield.
b.
To calculate: The P/E ratio of Pills Berry Company with a payout ratio of 50%.
Introduction:
P/E ratio:
The price-earnings ratio is computed by dividing the current share price of company by its EPS. It helps in valuing the present as well as future profitability of a company.
Payout Ratio:
The ratio that shows the total dividend paid by a company to its shareholders with respect to its net income is the payout ratio. It is computed by dividing the dividend paid by the company by its net income for the respective period.
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