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JAMB Principles of Accounts 2000 Question 33

Question 33

Interpretation of Accounts

Use the information below to answer questions 33 and 34.
Maimalari Ltd had I. Earnings per share 47k II. Dividend per share 30k III. Par value of each share ₦1.20 IV. Market price per share ₦1.50.
The company's earnings yield is

  1. A.20.00%
  2. B.25.00%
  3. C.31.33%
  4. D.39.17%.
Show the answer and explanation

Answer: C (31.33%)

Explanation

Earnings yield = earnings per share ÷ market price = 47k ÷ ₦1.50 = 31.33%.