Question

The next dividend payment by Dizzle, Inc., will be $2.55 per share. The dividends are anticipated to maintain a growth rate of 6 percent, forever. Assume the stock currently sells for $48.70 per share. What is the dividend yield? (

Answer 1

Answer:

5.23%

Explanation:

The formula and the computation of the dividend yield is shown below:

Dividend yield = (Annual dividend per share) ÷ (market price) × 100

where,

Market price = $48.70 per share

Annual dividend = $2.55 per share

So, the dividend yield = ($2.55 per share ÷ $48.70 per share) × 100

= 5.23%

It shows a relationship between the annual dividend by the market price so that the dividend yield can come