11.5 measuring corproate performacne

Question 1

what is the payout ratio
-meaning
-formual

Answer 1

measures % of a companys net income distributed as dividend

cash dividends declared/net income

note: can be calculated using per share info instead of total indo

Question 2

what is the dividend yield
-meaning
-formual

Answer 2

used for determining what % of share price a company is paying as divdends

dividends declared per share/market price per share

Question 3

two formuals for diviends record

Answer 3

payout ratio
dividend yield

Question 4

earnings performance ratios

Answer 4

basic earnings per share

Question 5

what is the earnings per share ratio
-meaning
-formual

Answer 5

measures profitability

income available to common shareholders (net income-preferred dividends) / weight avg number of ocmmon shares

Question 6

what is the return on equity
-meaning
-formual

Answer 6

measures profitability from the common shareholder view

income available to common shareholders/ average common shareholders equity

Question 7

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