Question

What dividend yield would be reported in the financial press for a stock that currently pays a $1 dividend per quarter and the most recent stock price was $45?

Answer 1

Answer:

Dividend yield = 8.88 %

Explanation:

Data provided in the problem:

Dividends per quarter = $ 1

thus,

dividend per year =  $ 1 × 4 = $ 4  ( because 1 year consists of 4 quarter)

stock price =  $ 45

therefore,

dividend yield = ( Dividend per year / stock price ) × 100 %

on substituting the values, we have

Dividend yield = ( $ 4 / $ 45) × 100 %

or

Dividend yield = 8.88 %