Question

A stock quote indicates a stock price of $85 and a dividend yield of 4%. The latest quarterly dividend received by stock investors must have been ______ per share. Multiple Choice $1.70 $3.40 $0.85 $2.55

Answer 1

Answer:

Quarterly dividend = $0.85

Explanation:

Shares are instruments that are used to obtain funds by businesses. Buyers of shares get ownership of part of the company in exchange for their money invested.

As a way to motivate investors to buy, companies quote a dividend payout to investors.

In the given scenario the dividend yield is 4% on a $85 stock

The yield is yearly

Yearly dividend = $85 * 0.04 = $3.4

We are required to get the quarterly dividend

Quarterly dividend = 3.4 ÷ 4

Quarterly dividend = $0.85