The Nanotechnology Research Company recently reported after-tax profits of $15.8

Question

The Nanotechnology Research Company recently reported after-tax profits of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company's stock currently trades at $60 per share. 1.) Determine what the stock's dividend yield would be if it paid $1.75 per share to common stockholders.
The Nanotechnology Research Company recently reported after-tax profits of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company's stock currently trades at $60 per share. 1.) Determine what the stock's dividend yield would be if it paid $1.75 per share to common stockholders.
The Nanotechnology Research Company recently reported after-tax profits of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company's stock currently trades at $60 per share. 1.) Determine what the stock's dividend yield would be if it paid $1.75 per share to common stockholders.

Explanation / Answer

Net Profits = 15.8 Million

Preferred dividend = 1 Million.

Hence earning avaliable for distribution to common stockholderws = 15.8 -1 = 14.8 Million

So total earning per share = 14.8/2.5 = $5.92/Share

So in this the dividend would be 1.75/Share and Retained earnings would be $4.17

hence dividend yield would be 1.75/60 =2.92%

Hence dividend yield = 2.92%

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