Chapter 40, Shareholder ratios

Question 1

Dividend per share

Answer 1

how much of profit is distributed to each shareholder

total dividends paid / number of shares issued

Question 2

Dividend Yield

Answer 2

gives a clear picture of the price of shares for potential shareholders
dividend per share / market price per share x 100

Question 3

Earnings per share

Answer 3

shows what each share earned in a financial year

profit for the year / number of shares issued

Question 4

Price-earnings ratio

Answer 4

measures confidence about what shares will earn the market price of share / earnings per share