Calculate dividend yield ratio of the companies

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Reference no: EM133206312

The following information is related to PQR company and XYZ company for the year 2013:

 

PQR Company

XYZ Company

Cash dividend declared and paid during the year

750,000

124,800

Common stock

25,000,000

12,000,000

Number of shares of common stock outstanding

50,000

24,000

Par value of a share

 50

50

Market value of a share

60

52

Both the companies belong to same industry. PQR is an old and well-established company where as XYZ is a new company. The historical data shows that the PQR has a stable annual dividend distribution to stockholders. 

Required: 

Calculate dividend yield ratio of both the companies. Which company would you recommend for investment in shares? Explain with reasons

Reference no: EM133206312

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