CA Final · Financial Reporting · Analysis of Financial Statements
Sunrise Foods Ltd has 1,00,000 equity shares, profit after tax Rs 8,00,000, market price per share Rs 96 and dividend payout ratio 25%. What are the earnings yield and dividend yield respectively?
Earnings yield is 8.33% and dividend yield is 2.08%. EPS is Rs 8 on 1,00,000 shares, so 8 divided by the price of Rs 96 gives 8.33%. Dividend per share is 25% of 8, which is Rs 2, and 2 divided by 96 gives 2.08%.
- A8.33% and 2.08%Correct
- B8.33% and 8.33%
- C12% and 3%
- D2.08% and 8.33%
Explanation
EPS = 8,00,000/1,00,000 = Rs 8. Earnings yield = 8/96 = 8.33%. DPS = 25% x 8 = Rs 2; dividend yield = 2/96 = 2.08%. Option 12% and 3% inverts the price-earnings logic and is wrong.
Did you get it right without looking?
One question tells you little. A timed set on Analysis of Financial Statements shows your real accuracy, how long you take and where you lose marks.
More Analysis of Financial Statements questions
- Sundaram Textiles Ltd reports the following for the year: net sales Rs 12,00,000 (all on credit), opening trade receivables Rs 1,30,000 and …
- Himalaya Pharma Ltd: net profit margin 5%, total asset turnover 2 times, and equity multiplier (total assets / equity) 2.5. Under the DuPont…
- Mehta Foods Ltd has net profit after tax Rs 9,00,000, sales Rs 90,00,000, average total assets Rs 60,00,000 and average shareholders' equity…
- Meera Pharma Ltd has EBIT of Rs 8,00,000, interest expense of Rs 2,00,000 and a tax rate of 25%. Its preference dividend is Rs 0. What is it…
- Mahesh Auto Ltd has the following: Profit before interest and tax Rs 9,00,000; interest expense Rs 3,00,000; tax rate 25%; equity shareholde…
- Sundaram Textiles Ltd reports for the year: sales Rs 12,00,000 (all credit), opening trade receivables Rs 1,00,000 and closing trade receiva…