[teeboz37]

This question is about dividend yield. The question is :

The shares of a company sells for $60. The firm P/E ratio is 15. Forty percent of earnings is paid out in dividends. What is the firms dividends yield?

I got two different answers, the first one I got was $75 then I go $30 when taking the 40% in perspective.

I just want to make sure I am on the right page, thanks for any help you all can provide.

[morgaine300]

No, you're not on the right page at all. First, a dividend yield isn't a dollar amount. It's a percent. I also don't have any idea where you got your answers from. And yes you have to consider the 40%, but I don't know where the $75 came from, so can't tell you where you went wrong and check your work.

P/E = price/earnings (per share)
Plug in what you know to get the earnings.

Then consider how much of those earnings they are paying in dividends. Then:
Dividend yield = dividends/price

[teeboz37]

Thanks