Accounting Multiple Choice Question – 5 September 2021

A company has an issued share capital of 8 million shares at £0.50 par value each. 

It pays a dividend of £1.6 million. The dividend yield is currently 12.5 %. 

What is the current market price of each share?

Select ONE answer:

1. £0.50
2. £0.80
3. £1.60
4. £3.20

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct ==> (1,600,000 / 8,000,000) = £0..20 dividend per share / 1.60 ==> 12.5% dividend yield
4. Not correct

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