Sardaukary[at]gmail.com writes:

- quote -

Break it down. First, let D = dividend, P = price, E = earnings.
Cover = 100 / (PE ratio x Yield as a percent)
= 100 / { (P/E) x [ 100 x (D/P) ] }
= 100 / { 100 x (P/E) x (D/P) }
= 100 / { 100 x (D/E) }
= 1 / (D/E)
= E/D
just as you stated.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

I've just started reading a book called Investing in Stocks & Shares by
Dr john White.

In it he states;

The dividend cover can be computed by the standard formula,
Cover = 100 / (PE x Net Yield percent)

This makes no sense to me as I thought dividend cover was just a ratio
between the total profits and the total dividends paid in a particular
year.

Has he made a type O or am I just being obtuse?

Thanks