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2 April, 22:59

What dividend yield would be reported in the financial press for a stock that currently pays a $1 dividend per quarter and the most recent stock price was $45?

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  1. 3 April, 01:11
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    Dividend yield = 8.88 %

    Explanation:

    Data provided in the problem:

    Dividends per quarter = $ 1

    thus,

    dividend per year = $ 1 * 4 = $ 4 (because 1 year consists of 4 quarter)

    stock price = $ 45

    therefore,

    dividend yield = (Dividend per year / stock price) * 100 %

    on substituting the values, we have

    Dividend yield = ($ 4 / $ 45) * 100 %

    or

    Dividend yield = 8.88 %
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