Common stock with a current market value of $19.25 per share issues a quarterly dividend of...

Question:

Common stock with a current market value of $19.25 per share issues a quarterly dividend of $0.25. What is its current annual dividend yield?

a. 1.30%

b. 2.13%

c. 3.53%

d. 5.19%

Dividend Yield

The dividend yield is a valuation ratio and expressed in percentage, by dividing the annual dividend per share in relation to the stock's current market price.

Answer and Explanation:

The correct answer is d. 5.19%

The question is looking for the annual dividend yield, thus we will compute for the annual dividend amount.

$0.25 * 4 quarters = $1 is the annual dividend amount.

To get the annual yield using the dividend yield ratio:

{eq}Dividend~Yield~Ratio~=~\frac{Annual~Dividend~Per~Share}{Stock~Price} {/eq}


{eq}Dividend~Yield~Ratio~=~\fracNo variable 1 defined.No variable 19.25 defined. {/eq}

The dividend yield of the common stock is at 5.19%


Learn more about this topic:

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What Is Dividend Yield? - Definition & Calculation

from Corporate Finance: Help & Review

Chapter 2 / Lesson 10
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