Question

Bob's Red Mill earned $76 million and paid a dividend of $25.08 million over the past year. If it has 10 million shares outstanding and the current price per share is $23, what is the dividend yield? Reminder: Div Yield = Total Dividends / Market Value of Equity = Dividend per share / Price Per Share

Answer 1

The dividend yield of Bob's Red Mill is approximately 10.9%.

Step-by-step explanation:

To calculate the dividend yield, we need to divide the total dividend by the market value of equity. First, we calculate the market value of equity by multiplying the number of shares outstanding (10 million) by the price per share ($23). The market value of equity is $230 million. Next, we divide the total dividend paid ($25.08 million) by the market value of equity ($230 million). This gives us a dividend yield of approximately 0.109 or 10.9%.