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18.07.2022 - 15:54

Maytag Company earns $4.80 per share. Today the stock is trading at $59.25. The company pays an annual dividend of $1.40. Calculate (a) the price-earnings ratio (round to the nearest whole number) and (b) the yield on the stock (to the nearest tenth perce

Question:

Maytag Company earns $4.80 per share. Today the stock is trading at $59.25. The company pays an annual dividend of $1.40. Calculate

(a) the price-earnings ratio (round to the nearest whole number) and

(b) the yield on the stock (to the nearest tenth percent).

Answers (1)

Miriam April 13, 2023 в 14:45

(a) To calculate the price-earnings ratio, divide the current stock price by the earnings per share: Price-earnings ratio = stock price / earnings per share Price-earnings ratio = $59.25 / $4.80 Price-earnings ratio = 12.34 (rounded to nearest whole number) Therefore, the price-earnings ratio for Maytag Company is 12. (b) To calculate the yield on the stock, divide the annual dividend by the current stock price: Yield on stock = annual dividend / stock price Yield on stock = $1.40 / $59.25 Yield on stock = 0.0236 Yield on stock = 2.4% (rounded to the nearest tenth percent) Therefore, the yield on the stock for Maytag Company is 2.4%.

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