Find the current yield. Round to the nearest tenth of a percent.
-You invested $6,775 in 125 shares of stock. During the following year, the company paid dividends of $2.25 per share.

Question

Quizplus · Accepted Answer

First, find the total dividend payout for the year by multiplying the dividend per share by the number of shares:

$2.25/share x 125 shares = $281.25

Next, find the current yield by dividing the total dividend payout by the amount invested and multiplying by 100 to convert to a percentage:

$281.25/$6,775 x 100 = 4.15%

Rounded to the nearest tenth of a percent, the current yield is 4.2%, which is option C. First, find the total dividend paid by the company:
125 shares × $2.25 per share = $281.25 total dividend
Then, find the dividend yield:
Dividend yield = (Total annual dividends ÷ Total investment) × 100%
Dividend yield = ($281.25 ÷ $6,775) × 100%
Dividend yield = 0.0415 (rounded to four decimal places)
Dividend yield = 4.2% (rounded to the nearest tenth) 
Therefore, the best choice is C.

Find the Current Yield