Question

What is the average of stockdiv/stockprice multiplied by 100 for each nation in the stock table after joining with the nation table?

Answer 1

The average dividend yield calculation for stocks after joining stock and nation data is indicative of historical practices in the S&P 500 where dividend percentages have varied across the decades, contributing to the total annual return alongside capital gains.

Step-by-step explanation:

The question pertains to calculating the average dividend yield for stocks within a nation after joining the stocks with the nation data from a hypothetical or classroom scenario. To compute this average, one would typically take the dividend value (stockdiv) for each stock, divide it by the stock's price (stockprice), and then multiply by 100 to convert it to a percentage. This is then averaged for each nation listed in the now combined stock and nation tables. The concept mentioned is reflective of real-world practices where historically, the S&P 500 index's average firm paid annual dividends equal to about 4% of its stock value from the 1950s to the 1980s, and dividends have since dropped to about 1% to 2% since the 1990s. It is also important to consider that while dividends are a portion of the total annual return, capital gains factor into the return as well. Patterns in capital gains and dividends have changed over the decades, affecting the investor's total return on their stock investments.

Answer 2

The average of 'stockdiv/stockprice' multiplied by 100 represents the dividend yield for each nation's stock, reflecting the annual dividends in percentage terms of the stock price. Historical trends indicate a decline in dividend yields from about 4% down to 1-2% since the 1990s, stressing the shift towards greater capital gains over dividends as part of total returns.

Step-by-step explanation:

The question pertains to calculating the average rate of stock dividends in relation to the stock price (often called the dividend yield) for each nation after joining with the stock table. To calculate this, one would take the average of 'stockdiv/stockprice' multiplied by 100 for each nation. This average is an indicator of the dividend payout in relation to the stock price, which is an aspect of the total return of an investment in stocks. Historical data indicates that dividend yields fluctuated across decades, with the 1950s to 1980s maintaining around a 4% dividend yield, while the 1990s onwards experienced a considerable drop to about 1% to 2%. Factors affecting this include changes in dividend payout policies and variations in stock price movements.

For example, using the provided historical context, if a stock's dividend (stockdiv) is $2 and the stock price (stockprice) is $100, the dividend yield would be calculated as ($2/$100) * 100 = 2%. Averaging this yield across all the stocks in each nation, after the necessary data has been joined, would provide the average dividend yield per nation.

It is important to note that the total annual rate of return from investing in stocks includes both the dividend yield and capital gains from the increase in stock value, but due to technicalities in calculation, these do not sum up exactly to the total return.