4. Fridgidaire Company earns $2.00 per share. Today the stock is trading at $40. The company pays an annual dividend of $1.00. a. Calculate the price-earnings ratio. (Round your answer to the nearest whole number.) Price-earnings ratio b. Calculate the yield on the stock. (Round your answer to the nearest tenth percent.) Yield on the stock
Accepted Solution
A:
Answer:price earning ratio are 20:1yield of stock is 2.5%Step-by-step explanation:given data earn = $2 per share price treading = $40 dividend = $1to find outprice-earnings ratio and yield on the stocksolutionwe find here price earning ration by given formula that is ratio = price treading / earning .....................1put here valueratio = 40 / 2 ratio = 20so price earning ratio are 20:1andyield of stock is calculated asyield of stock = dividend / price treading ...............2put here valueyield of stock = 1/ 40yield of stock = 0.025so yield of stock is 2.5%