In: Finance
A company's revenues are $623 million. Its operating margin is 43%, net margin is 21.7% and dividend payout ratio is 10%. Market capitalization is $440 million and there are 21 million shares outstanding. What is the dividend yield?
Asnwer:
Calculation of the Dividend yield:
Formula,
Dividend yield = Annual dividend / Market Capitalization
Annual Dividend = Revenue x Net margin x Dividend payout ratio
= $623 million x 21.7% x 10%
= $135.191 million x 10%
= $ 13.5191
Dividend yield = $13.5191 / $440
= 0.0307 or 3.07% (Answer)