Question

If a stock you buy is $50 per share and pays $2 per year in total dividends;

what is the dividend yield of the stock?*

Answer 1

4%

Step-by-step explanation:

Dividend yield shows the dividends paid out annually as a percentage of the share market price.

The formula for calculating dividend yield is the annual dividend per share/market value per share.

Dividend yield = dividend/ market share price x 100

Dividend yield = 2/50 x 100

Dividend yield = 0.04 x 100

Dividend yield = 4%