Maple Corporation is expected to pay an annual dividend of $0.45 per share in the coming year,and to trade for $12.50 at the end of the year.If investments with the same risk as Maple's stock have an expected return of 6.95%,what is Maple's dividend yield?

Question

Quizplus · Accepted Answer

The dividend yield is the annual dividend divided by the current stock price. In this case, the annual dividend is $0.45 and the current stock price is $12.50. Therefore, the dividend yield is $0.45/$12.50 = 3.6%.

Maple Corporation Is Expected to Pay an Annual Dividend of $0.45