Investment Ratios

Question 1

Earnings per share

Answer 1

Net profit (after preference dividend)
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No.of ordinary shares issued

Question 2

Price earnings ratio

Answer 2

Market value of one ordinary share
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Earnings per share

Question 3

Dividend per ordinary share

Answer 3

Ordinary dividend x100
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No. of ordinary shares issued

Question 4

Dividend cover

Answer 4

Net profit (after tax and preference dividend)
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Ordinary dividend

Question 5

Dividend yield

Answer 5

Dividend per ordinary share x100
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Market value

Question 6

Period to recoup share price at present payout rate

Answer 6

Market value of one ordinary share
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Dividend per share

Question 7

Projects market value of one ordinary share

Answer 7

Price earnings ratio x earnings per share