Question

naya is keeping an eye on a stock in her portfolio because even though the companys earnings per share have been consistently increasing, the companys dividends have been getting smaller and smaller. she is curious if the company is planning some sort of expansion, or if it is struggling.

what financial metric is naya analyzing?

○ dividend per share
○ cap gains
○ pe ratio
○ end yield

Explanation:

Naya is analyzing the company's dividends getting smaller. Dividend yield is calculated as (Dividend per Share / Market Price per Share) * 100. But here, the focus is on the dividend amount per share changing. Wait, no—wait, the options: Dividend per share is the total dividends paid divided by number of shares, so if dividends (total) are getting smaller, or per share? Wait, the problem says "dividends have been getting smaller and smaller"—dividend per share is the dividend amount per each share. Capital gains are from price appreciation, P/E ratio is price to earnings, dividend yield is dividend over price. So since she's looking at the size of dividends (per share, as earnings per share is increasing, but dividends per share decreasing), the metric is Dividend per Share. Wait, no—wait, dividend yield is (dividend per share / price), but if dividends per share is decreasing, that's the metric. Wait, the options: the first option is Dividend per share. Let's check each:

• Dividend per share: amount of dividend paid per each share. If dividends (total or per share) are getting smaller, this metric tracks that.
• Capital gains: profit from selling stock at higher price than bought, not related to dividends.
• P/E ratio: price divided by earnings per share, about valuation, not dividends.
• Dividend yield: (dividend per share / market price) * 100, which is a percentage, but the problem is about the size of dividends (getting smaller), so dividend per share is the amount per share, so if that's decreasing, that's the metric. So the correct option is Dividend per share.

Answer:

A. Dividend per share