Question

You purchased 200 shares of stock at a price of $45.36 per share. over the last year, you have received total dividend income of $205. what is the dividend yield?

Answer 1

To calculate the dividend yield, one multiplies the number of shares by the price per share to find the total investment cost, divides the total dividend income by this cost, and then multiplies by 100 to convert it to a percentage. In this scenario, with 200 shares at $45.36 each and $205 in dividends, the dividend yield is approximately 2.259%.

Step-by-step explanation:

The student has inquired about how to calculate the dividend yield of a stock investment. To find the dividend yield, we will use the total dividend income received by the investor and the initial cost of purchasing the shares. In this case, the investor purchased 200 shares at $45.36 per share and received a total dividend income of $205 over the last year.

The formula to calculate the dividend yield is as follows:

1. Find the total investment cost by multiplying the number of shares by the price per share.
2. Divide the total dividend income by the total investment cost.
3. Multiply the result by 100 to get the percentage yield.

Performing the calculation:

1. Total investment cost = 200 shares x $45.36 per share = $9,072.
2. Dividend Yield = ($205 dividend income / $9,072 investment cost) x 100.
3. The dividend yield = (0.02259) x 100 = 2.259%.

Therefore, the dividend yield is approximately 2.259%.