Dividends and Equity Flashcards
1
Q
Why are these ratios important?
A
they measure the net income in terms per share and how much net income goes to dividends
2
Q
Basic Earnings per Share
A
net income - preferred dividends / weighted average number of common shares outstanding
3
Q
Diluted EPS
A
net income - preferred dividends + add-backs / weighted common shares outstanding + convertible securities
4
Q
Dividend Payout
A
Dividends per share / earnings per share
or
total dividends / net income
5
Q
What is Dividend Payout?
A
how much money is the company returning to shareholders
6
Q
Dividend Yield
A
dividend per share / stock price
7
Q
What are Dividend Yields used for?
A
by investors to compare it to bond yield
