The correct answer is: B. dividends per share divided by earnings per share.
The dividend-payout ratio is a measure of how much of a company’s earnings are paid out as dividends. It is calculated by dividing the company’s dividends per share by its earnings per share. A high dividend-payout ratio indicates that a company is returning a lot of money to its shareholders, while a low dividend-payout ratio indicates that a company is reinvesting more of its earnings in the business.
Option A is incorrect because the dividend yield is a measure of the annual dividend paid per share divided by the current market price per share. The capital gains yield is a measure of the increase in the market price of a share over a period of time, divided by the initial purchase price.
Option C is incorrect because the par value of a share is the nominal or face value of a share of stock. It is the amount that is printed on the face of the stock certificate and is the amount that the company is legally obligated to pay to the shareholder if the company is liquidated.
Option D is incorrect because the current price per share is the price at which a share of stock is currently trading on the stock market.