Last year, Sylvia purchased 300 shares of Webster Companies stock at a price of $40.27 per share. Today, those shares are valued at $38.20 a share. Over the last year, Sylvia received total dividend income of $450. What is the current dividend yield on Webster stock if the firm pays a constant dividend?

Question

Quizplus · Accepted Answer

The current dividend yield is calculated as the total annual dividends received divided by the current market value of the shares. Sylvia received $450 in dividends for 300 shares, which is $1.50 per share. The current share price is $38.20. Thus, the dividend yield is ($1.50 / $38.20) * 100% = 3.93%.

Last Year, Sylvia Purchased 300 Shares of Webster Companies Stock