On December 31, 2014, Renda\'s common stock sold for $29 per share, and dividend
ID: 2591288 • Letter: O
Question
On December 31, 2014, Renda's common stock sold for $29 per share, and dividends per share were $0.60. Compute Renda's dividend yield during 2014.
(Round your answer to one decimal place.)
A. 3.1%
B. 2.1%
C. 6.0%
D. 1.0%
Renda Company
Consolidated Balance Sheets
December 31, 2014 and 2013
(In millions, except per share data)
2014
2013
Assets
Current assets:
Cash and equivalents $600 $435
Accounts and notes receivable 750 850
Inventories, at cost, not in excess of market 144 114
Prepaid expense and other current assets 590 435
Total current assets 2,084 1,834
Property and equipment:
Property and equipment, at cost 28,770 26,800
Accumulated depreciation and amortization (8,850) (7,100)
Net property and equipment 19,920 19,700
Other assets:
Investments in affiliates 1,160 1,055
Goodwill, net 1,780 1,580
Miscellaneous 1,020 1,080
Total other assets 3,960 3,715
Total assets $25,964 $25,249
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $620 $640
Income taxes 75 12
Other taxes 200 175
Accrued interest 187 186
Accrued restructuring and restaurant closing costs 120 300
Accrued payroll and other liabilities 924 735
Current maturities of long-term debt 384 315
Total current liabilities 2,510 2,363
Long-term debt 9,000 9,700
Other long-term liabilities and minority interests 700 520
Deferred income taxes 1,000 1,020
Total liabilities $13,210 $13,603
Stockholders' equity:
Preferred stock, no par value; authorized—140.0 million shares; issued—none --- ---
Common stock, $.01 par value; authorized—2.0 billion shares;
issued—1,300 million shares 13 13
Additional paid-in capital 1,100 2,633
Unearned ESOP compensation (91) (100)
Retained earnings 21,952 19,700
Accumulated other comprehensive income (loss) (820) (1,650)
Common stock in treasury, at cost; 100 and 250 million shares (9,400) (8,950)
Total stockholders' equity 12,754 11,646
Total liabilities and stockholders' equity $25,964 $25,249
Renda Company
Consolidated Statements of Income (Adapted)
Years Ended December 31, 2014 and 2013
(In millions, except per share data)
2014
2013
Revenues
Sales by Company-operated restaurants
$13,400
$11,500
Revenues from franchised and affiliated restaurants
4,350
3,800
Total revenues
17,750
15,300
Food and paper (Cost of goods sold)
2,680
4,025
Payroll and employee benefits
3,600
3,300
Occupancy and other operating expenses
3,100
2,700
Franchised restaurants—occupancy expenses
950
835
Selling, general, and administrative expenses
1,835
1,750
Other operating expense, net
555
840
Total operating expenses
12,720
13,450
Operating income
5,030
1,850
Interest expense
360
350
Other nonoperating expense, net
98
65
Income before income taxes
4,572
1,435
Income tax expense
1,600
574
Net income
$2,972
$861
Per common share basic:
Net Income
$2.48
$0.82
Dividends per common share
$0.60
$0.40
(In millions, except per share data)
2014
2013
Explanation / Answer
Dividend yield = (Cash Dividend per share/ Market value per share) * 100
= ($0.60 / $29)*100
= 2.068 %
= 2.1%
Answer is B
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