Over the last year, Calzone Corporation paid a quarterly dividend of $0.10 in each of the four quarters. The current stock price of Calzone Corporation is $39.78. What is the dividend yield for Calzone stock?
The dividend is paid out of the net income to the shareholders for their investment in the company's equity. The dividend yield is a ratio that measures the proportion of the dividend paid relative to the market price per share. A company that has a high dividend yield usually has a higher payout ratio which indicates that not much of its net income is retained.
Answer and Explanation:
Calzone Corporation's stock's dividend yield is 1.01%.
Calzone Corporation has shared the following information for last year:
- Quarterly dividend = $0.10
- Current stock price = $39.78
The first step is to determine the annual dividend:
- Annual dividend = Quarterly dividend * 4times
- Annual dividend = $0.10 * 4times
- Annual dividend = $0.40
The second step is to determine the dividend yield:
- Dividend yield = Annual dividend / Current stock price
- Dividend yield = $0.40 / $39.78
- Dividend yield = 1.01%
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Corporate Finance: Help & ReviewChapter 2 / Lesson 10