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?
Assessment:JAMB UTME - Principles of Accounts - 2018Subject:Financial Accounting
The earnings yield is a measure of the return on investment for a company's earnings. It is calculated by dividing the earnings per share by the market price per share, and expressing the result as a percentage.
In this case, Tanko Ltd's earnings per share is 47k (0.47 Naira), and its market price per share is NM1.50 (1.50 Naira). So, the earnings yield can be calculated as follows:
Earnings yield = (Earnings per share / Market price per share) x 100%
= (0.47 / 1.50) x 100%
= 31.33%
Therefore, the earnings yield for Tanko Ltd is 31.33%, which means that for every Naira invested in the company's stock, investors can expect a return of 31.33 Naira in earnings.