Question

Miranda purchased 425 shares of Dagofi Radar stock at $14.15 apiece. She earns $374.00 in dividends every year. What is the yield on Miranda’s Dagofi Radar stock?

a.
0.0622
b.
6.22
c.
26.4
d.
0.0264

Answer 1

The correct answer is A) 0.0622

Answer 2

We are asked to evaluate the yield of the whole stock, not just one share. We have that Miranda has paid in total 425*14.15=6013.75$ to acquire the shares (total stock). The yield of an asset is its profit per year over its cost. In this specific case, we have that the yield is 374/6013.75. The result of this calculation is choice a.