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Dividends, Retained Earnings, and Yields

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Springsteen Music Company earned $820 million last year and paid out 20 percent of earnings in dividends.

a. By how much did the company's retained earnings increase?

b. With 100 million shares outstanding and a stock price of $50, what was the dividend yield? (Hint: First compute dividends per share.)

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This solution is comprised of a detailed explanation to answer how much did the company's retained earnings increase and what was the dividend yield for Springsteen Music Company.

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a. By how much did the company's retained earnings increase?

Dividends payout = $820 x 20% = ...

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