The company’s earnings yield is?

Earnings per share 47k

Dividends per share 30k

Per value of each share N1.20

market price per share NM1.50

 

A. N20.00%
B. N25.00%
C. N31.33%
D. N39.17%

Correct Answer:

Option C – N31.33%

Explanation

The earnings yield refers to the earnings per share for the most recent 12-month period divided by the current market price per share. The earnings yield (which is the inverse of the P/E ratio) shows the percentage of each dollar invested in the stock that was earned by the company.

EPS ÷ Market price

47/1.50 = N31.33