Response to the following problem:
General Motors Corporation had earnings per share of $5.62 for 2003 and $4.95 for 2004. In addition, the dividend was $2.00 per share during these two years. The market price for GM closed at $40.17 per share on December 31, 2004.
a. Determine the dividend yield for General Motors on December 31, 2004. Round percentages to two decimal places.
b. Determine the 2003 and 2004 dividend payout ratio for General Motors. Round percentages to one decimal place.
c. Interpret these measures.