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International Business Machine (IBM) stock has its closing price at $172.71 (2/17/17). It...

Question:

International Business Machine (IBM) stock has its closing price at $172.71 (2/17/17). It currently (2017) pays $1.40 per share quarterly dividend (the dividend was $0.50 per share in 2008).

Based the current closing price of IBM stock on 2/17/17, what is the yield of IBM stock?

Dividend Yield:

Dividend yield is a way to determine the annual percentage return from a dividend paying stock. It allows the investor to compare the attractiveness of various dividend paying investments. The dividend yield changes as the stock price changes and is best used with companies who are consistent and predicable in their payment of dividends.

Answer and Explanation:

The dividend yield of IBM in in this example is 3.24%

Div Yield = Annual Div / Stock Price

$1.40 x 4 = $5.60 $5.60 / $172.71 = .0324 = 3.24%


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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