Q40. Dividend yield
How is the dividend yield calculated?
A40.
Dividend yield = (A) / (B)
Where,
(A) = Annual dividends per common share
(B) = Market price of common stock per share
[Entity 40-a]
Annual dividends per common share = $2.25
Market price of common stock per share = $45.00
Dividend yield
= $2.25 / $45.00 = 5%
[Entity 40-b]
Annual dividends per common share = $2.08
Market price of common stock per share = $52.00
Dividend yield
= $2.08 / $52.00 = 4%
[Note]
Dividend yield is higher for Entity 40-a than for Entity 40-b.
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