Day: October 17, 2022

The following information relates to a company.

• profit after tax £240,000
• dividend cover – 3 times
• number of ordinary shares of £1 – 250,000
• market price of one ordinary share – £4

What is the dividend yield?

Select ONE answer:

1. 8%
2. 24%
3. 26%
4. 32%

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 1

1. Correct – £240,000 / 3 = £80,000 / 250,000 = = > Dividend per share = £0.32 = = > / £4 = 8%
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.