Bellbottom Gongs, Inc. pays a quarterly dividend of $0.70, has a PE ratio of 14, and closed yesterday at $48.25. What is the dividend yield?

Question

Quizplus · Accepted Answer

Dividend yield is calculated by dividing the annual dividend per share by the stock price per share.

Annual dividend per share = Quarterly dividend x 4 
= $0.70 x 4 
= $2.80

Dividend yield = Annual dividend per share / Stock price per share 
= $2.80 / $48.25 
= 0.058 or 5.8%

Therefore, the correct answer is C, 5.8%.