Relative Valuation (45 min) X KNOWLEDGE CHECK On the chart below, if the earnings per share grew from 7.61 on December 31, 2018,

Question

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Relative Valuation (45 min) X KNOWLEDGE CHECK On the chart below, if the earnings per share grew from 7.61 on December 31, 2018,

to 7.82 on June 30, 2019, what would the implied earnings yield be? 2.2% 4.1% 24.4% 1.8% Click to open/close chart. II Search> MCD US Equity 4 Load Actions 3) Save As Graph Fundamentals YTD 10Y Max Quarterly Table R Fields/Securities 6M 1Y 3Y SY 7Y Options 8.00 Track Annotate Zoom O Reset 7.61 750 190.71 7.61 Earnings per Share (L1) Dividends per Share (L1) 4.19 180 Price per Share (R2) 190.71 7.00 6.50 160 6.00 5.50 140 5.00 120 4.50 4.19 4.00 100 3.50 02 2016 02 2017 02 Q3 2015 04 04 Q3 04 Q1 Q2 2018 03 04 2019

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1 answer:

soldi70 [3.6K] · Answer 1 · 2026-02-23T06:35:36+03:00

Response:

The correct answer is option 2=4.1%.

Explanation:

Initially, the question contains a typographical error. It appears to have been inaccurately transcribed from an image. By searching online, the relevant images can be accessed which may clarify the issue.

Considering this, let's address the problem identified.

First, the implied earnings yield is calculated as follows:

$E_{year} = \frac{(earnings-per-share)}{price-per-share}$

Substituting into the equation:

$E_{year}=\frac{7.82}{190.71}\\$

$E_{year}=0.041\\$

We can express this in percentage form as:

$E_{year}=4.1 %\\$

Consequently, the answer is option 2=4.1%.