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The following information is available for Payton Incorporated. At the end of the year, the market price of its common stock is $550 per share. Earnings per share totaled $100 and dividends per share in the amount of $15 were paid during the year. The dividend yield is:

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TomShelby

Answer:

Dividends yield 2.72%

Explanation:

dividends yield formula:

[tex]\frac{annual\: dividends}{share \:price}  \times 100 = dividends\: yield[/tex]

dividends 15

market price 550

The earning per share are not relevant for calculation.

15/550 = 0.027272727

Dividend yield 2.72%

This means that if an investor purchase the share at current price and the dividends remains at the same value, his investment will yield 2.72% per year