BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

Solutions

Chapter
Section
BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Why would the dividend yield differ significantly from the return on common stockholders’ equity?

To determine

Concept Introduction:

Dividend Yield Ratio:

Dividend Yield ratio is calculated as percentage by dividing the Dividend per share by Market price per share. The formula for the Dividend Yield ratio is as follow:

  Dividend Yield Ratio =  Dividend per shareMarketprice per share 

Return on Equity:

Return on Equity is the rate of return earned by the Stockholders on their investment in the company. It is calculated with the help of following formula:

  Return on Equity = Net IncomeAverage Stockholders Equity

The Average stock holder's equity calculated with the help of following formula:

  Average stock holders equity=( Beginning stock holders equity + Ending stock holders equity)2

To Indicate:

The Difference between the dividend yield and return on common stockholder's equity

Explanation

Dividend Yield ratio is calculated as percentage by dividing the Dividend per share by Market price per share. The formula for the Dividend Yield ratio is as follow:

  Dividend Yield Ratio =  Dividend per shareMarketprice per share 

Return on Equity is the rate of return earned by the Stockholders on their investment in the company

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the three major parts of a T account?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What are the major elements of Herzbergs motivationhygiene theory?

Foundations of Business (MindTap Course List)

What is commodity money? What is flat money? Which kind do we use?

Principles of Economics (MindTap Course List)

What are the key factors on which external financing depends, as indicated in the AFN equation?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)