Calculation of Dividend yield

Leo Ltd has 50 million $0·50 ordinary shares in issue. The total market value of these shares is $150 million. At the end of Leo Ltd’s fourth year of operation, after-tax profits were $20 million and are expected to rise by 25% in the forthcoming year. Leo Ltd has a constant dividend payout ratio of 40% and intends to increase the dividend by 5% per year after payment of the forthcoming year’s dividend.

What is the expected rate of return (i.e. dividend yield) from the ordinary shares of Leo Ltd?

a 5·10%
b 10·33%
c 11·67%
d 15·00%

Answer – C

Share price = $150m/50m = $3·00
Dividend per share = ($20m x 1·25) x 0·4/50m = $0·20
Expected return = (20/300) + 0·05
= 11·67%

I have a doubt on the 300 which is in the expected return calculation. How it is derived? Could you please explain?