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JAMB - Accounts Principles Of Accounts (2018 - No. 79)

Tanko Ltd had
Earnings per share 47k
Dividends per share 30k
Per value of each share N1.20
market price per share NM1.50

 

Tanko Ltd had
Earnings per share 47k
Dividends per share 30k
Per value of each share N1.20
market price per share NM1.50

 

Tanko Ltd had
Earnings per share 47k
Dividends per share 30k
Per value of each share N1.20
market price per share NM1.50

 

The company's earnings yield is?
N20.00%
N25.00%
N31.33%
N39.17%

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

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