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Short Qustion no1

Forums › ACCA Forums › ACCA FM Financial Management Forums › Short Qustion no1

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  • December 3, 2015 at 9:53 pm #287361
    adilmeer1986
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Dividend yield 8% and dividend cover 2.4
    what is the P/E ratio?
    Please provide working
    Regards

    December 3, 2015 at 11:10 pm #287372
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 7
    • ☆

    Div yield = DPS/Price
    Div cover = EPS/DPS

    Div Yield x Div cover = D/P x E/D = E/P
    = 0.08 x 2.4 = 0.192

    Inverse of E/P (earnings yield) = P/E
    0.192 to P/E = 1/0.192 = 7.44

    Cheers

    Alex

    December 6, 2015 at 8:16 pm #288307
    adilmeer1986
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    thanks
    i did not understand last bit
    cheers

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