The stock of north american dandruff company is selling at $80 per share. the firm pays a dividend of $2.50 per share. (a) what is the dividend yield? (round your answer to 3 decimal places. omit the "%" sign in your response.) (b) if the firm has a payout rate of 50 percent, what is the firm’s p/e ratio? (enter numeric value only.)

(a) Dividend Yield = 3.125 percent

(b) P/E Ratio = 16 times

Explanation:

(a) Dividend yield = X 100

Current year dividend = $2.5

Company's selling price of share = $80

Dividend yield = = 3.125 percent

(b) Given payout ratio is 50 percent that means earnings X 50% = $2.5

Earnings = = $5

P/E ratio = Price / Earnings = $80/$5 = 16 times.

Dividend Yield = 3.125 percent

P/E Ratio = 16 times

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