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15 February, 19:01

The stock of ABC Company has a current market price of $75. The corporation has paid a dividend of $3.75 over the last 12 months and has earnings per share of $5. What is the dividend yield?

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  1. 15 February, 19:15
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    The dividend yield is 5%

    Explanation:

    For computing the dividend yield ratio, we have to use the formula pf dividend yield ratio which is shown below:

    Dividend yield ratio = Annual dividend : Stock market price

    where,

    The Annual dividend is $3.75

    And, the stock price is $75

    Now put these values to the above formula

    So, the value would be equal to

    = $3.75 : $75

    = 0.05

    = 5%

    Hence, the dividend yield is 5%
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