Over the last year, Calzone Corporation paid a quarterly dividend of $0.10 in each of the four...

Question:

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?

Dividend Yield:

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:


Answer:

Calzone Corporation's stock's dividend yield is 1.01%.

Explanation:

Calzone Corporation has shared the following information for last year:

  • Quarterly dividend = $0.10
  • Current stock price = $39.78

Computation:

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%

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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