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VCE 11 General 2023

4.05 Shares, dividends and yields

Worksheet
Shares, dividends and yields
1

The following table highlights the shares Dave owns in a number of companies:

Share Price (dollars)Number of Shares OwnedValue of Shares (dollars)Dividend Yield
Straits Airways1.68800A2\%
Outback Mining Co.20.45200B5.4\%
Bargain Supermarkets14.34300C4.8\%
Bank of Oz11.22150D3\%
Insurance Corp.7.60600E1.25\%
a

Calculate the value of:

i
A
ii
B
iii
C
iv
D
v
E
b

Calculate the total value of shares that Dave owns.

c

Calculate the dividend per share earned on shares in the company 'Straits Airways'.

d

Calculate the total dividend earned on Dave's shares in the company 'Bargain Supermarkets'. Round your answer to the nearest whole dollar.

2

The annual earnings per share is \$1.25 and the market price of the share is \$12.25.

Calculate the price-to-earnings ratio.

3

The market value of shares in Florist Gump is \$18.55 per share. The P/E ratio is 10.6.

Calculate the annual earnings per share.

4

The P/E ratio of shares in Vinyl Resting Place is 9.4. The annual earnings per share is \$1.75.

Calculate the price of each share.

5

Calculate the dividend per share when a company's net profit of \$373\,520 is to be distributed evenly among its 128\,800 shares.

6

Calculate the dividend yield, correct to one decimal place, when a firm with a share price of \$38.20 pays a dividend of \$1.38 per share.

7

Calculate the dividend per share when a company's share price is \$34.00 and its dividend yield is 5.3\%.

8

Calculate the share price of a company that pays a dividend of \$3.00 per share and has a dividend yield of 2.8\%.

9

Consider the following companies share and dividend information:

  • Company A has a share value of \$2.50 and paid a dividend of \$0.19 per share.

  • Company B has a share value of \$8.40 and paid a dividend of \$0.63 per share.

  • Company C has a share value of \$16.25 and paid a dividend of \$1.43 per share.

a

Calculate the dividend yield for Company A.

b

Calculate the dividend yield for Company B.

c

Calculate the dividend yield for Company C.

d

Which company had the highest dividend yield?

10

Sean buys 6000 shares in Company A at \$6.25 each. The company pays a dividend of 55c per share. Sean also buys 3000 shares in Company B at \$7.50 per share, which pays a dividend of \$0.57 per share.

a

Calculate the dividend yield for company A.

b

Calculate the dividend yield for company B.

c

What is the overall dividend yield for Sean's investment?

11

Amelia buys shares in a company at \$7.25 per share. The company pays a dividend in July of 27.5c and a dividend in February of 27.6c. What is the dividend yield for the whole financial year?

12

A company has a net profit of \$13.2 million that it will fully distribute to the owners of its 82.5 million shares.

a

Calculate the dividend per share that will be paid to shareholders.

b

Calculate the dividend yield if the share price is \$26.37. Round your answer to one decimal place.

c

In order to raise funds, the company issues another 2.2 million shares. Given that the company expects its profits to increase by 1\% in the next year and it intends to distribute all of its net profit to shareholders, what will its dividend yield be if its share price remains the same? Round your answer to one decimal place.

13

Mastaneh has a share portfolio as detailed below. Assume that all earnings are distributed as dividends.

CompanyNumber of sharesPrice per shareDividend per shareDividend yield
\text{Sham Rock Diamonds}300\$1.76y12.5\%
\text{The Codfather}700\$1.25\$0.08x
\text{Curl Up and Fry}900\$1.25\$0.043.2\%
a

Calculate the total value of this share portfolio.

b

Calculate the value of x. Express your answer as a percentage.

c

Calculate the value of y.

d

Calculate the price-to-earnings ratio of Sham Rock Diamonds.

e

Calculate the price-to-earnings ratio of The Codfather.

f

Calculate the price-to-earnings ratio of Curl Up and Fry.

g

Based on the price-to-earnings ratio, which company is the best investment?

14

Freya paid \$7800 for 300 shares that have a dividend yield of 2.5\%. The company returned 52\% of its profits to shareholders as a dividend.

a

Calculate the price per share.

b

Calculate the dividend per share.

c

Calculate the total earnings per share.

d

Calculate the price-to-earnings ratio.

15

The table below summarises information about four companies:

CompanyShare priceEarnings per shareP/EDividend per shareDividend yield
\text{True Blue Holdings}\$10.25\$1.25a\$0.2872.8\%
\text{Sew What}\$12.75b3.4\$0.6124.8\%
\text{Juan In A Million}\$17.25\$3.754.6c2.8\%
\text{Wok On Water}\$22.75\$8.752.6\$1.547d

Calculate the value of:

a

a

b

b

c

c

d

d

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Outcomes

U1.AoS2.6

concepts of ratio, proportion, percentage, percentage change and rate, and unitary method

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