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Currently, Brad pays annual dividend of $5.68. If the stock is selling for $180, what is the...

Question:

Currently, Brad pays annual dividend of $5.68. If the stock is selling for $180, what is the dividend yield?

Dividend Yield:

The dividend yield is the ratio of the annual dividend per share relative to the market price of the share. It is the return that an investor yields from his investment in the stock of a company. A stock with high dividend yields has a declining stock price and hence they are not attractive. A stock with low dividend yields has a high stock price leading to the stock being a more attractive investment.

Answer and Explanation:


Answer:

Brad's stock's dividend yield is 3.16%.

Explanation:

As per the data:

  • Annual dividend per share = $5.68
  • Current price per share = $180

Computation:

  • Dividend yield = Annual dividend per share / Current price per share
  • Dividend yield = $5.68 / $180
  • Dividend yield = 3.16%

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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