Dividend yield 8% and dividend cover 2.4
what is the P/E ratio?
Please provide working
Regards
ACCA Forums
FMShort Qustion no1
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
thanks
i did not understand last bit
cheers
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