How do you calculate stock price with dividend payout ratio?
The dividend payout ratio can be calculated as the yearly dividend per share divided by the earnings per share (EPS), or equivalently, or divided by net income dividend payout ratio on a per share basis. In this case, the formula used is dividends per share divided by earnings per share (EPS).
How do you calculate dividend payout?
The dividend payout ratio can be calculated as the yearly dividend per share divided by the earnings per share (EPS), or equivalently, the dividends divided by net income (as shown below).
What is share Market dividend?
Definition: Dividend refers to a reward, cash or otherwise, that a company gives to its shareholders. Dividends can be issued in various forms, such as cash payment, stocks or any other form. A company's dividend is decided by its board of directors and it requires the shareholders' approval.
Question
What is the market price of a share of stock for a firm that pays dividends of $1.20 per share, has a P/E of 14, and a dividend payout ratio of 0.4?
PE Ratio
The Price Earning ratio measures how expensive a stock is, that is the amount of money than an investor has to pay for $1 in earnings of a given company. The higher the PE ratio, the more expensive the stock is, the lower the PE ratio, the cheaper the stock is.