Answer (C) is correct . Dividend yield is the dividend per share divided by the market price. Oakland’s was thus 2% [($0.20 × 4) ÷ $40].
Answer (A) is incorrect because This percentage results from failing to recognize that the $0.20 dividend is for a single quarter.
Answer (B) is incorrect because Ten percent results from improperly adding the $0.80 annual dividend and the $3.20 earnings per share to arrive at $4.00 for use as the numerator.
Answer (D) is incorrect because This percentage results from using earnings per share, rather than market price, in the denominator and using $0.20 as the annual dividend.
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