Pilgrim Corp. stock currently sells for $25. The dividend yield is 4% and the dividend payout ratio is 25%. The dividend is ________ and the earnings per share are ________. SHOW YOUR WORK!

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Pilgrim Corp. stock currently sells for $25. The dividend yield is 4% and the dividend payout ratio is 25%. The dividend is ________ and the earnings per share are ________. SHOW YOUR WORK!

 

  1. A) $3.00; $1.00
  2. B) $1.00; $4.00
  3. C) $.12; $1.00
  4. D) $.25; $6.25
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Answe: B) $1.00; $4.00

 

Working notes for the above answer is as under

First of all we will calculate devidend Yeild as follow

dividend yield

=Annual dividend per share x Price per share

=25 x 4%

=25*0.04

=1

We have been given in the sum that , The dividend payout ratio is 25%.  so ot  of 100% company pay 25% as dividend

So the earnings per share is calculated as follow

= $ 1 / 25%

=$ 4

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