Use the table for the question(s)below.
Consider the following price and dividend data for Ford Motor Company:

-Assume that you purchased Ford Motor Company stock at the closing price on December 31,2004 and sold it after the dividend had been paid at the closing price on January 26,2005.Your dividend yield for this period is closest to:
A)-8.15%
B)-8.80%
C)0.70%
D)0.75%
E)1.25%

Question

Use the table for the question(s)below.
Consider the following price and dividend data for Ford Motor Company:
 
-Assume that you purchased Ford Motor Company stock at the closing price on December 31,2004 and sold it after the dividend had been paid at the closing price on January 26,2005.Your dividend yield for this period is closest to:
A)-8.15% 
B)-8.80% 
C)0.70% 
D)0.75% 
E)1.25%

Quizplus · Accepted Answer

To calculate the dividend yield, we need to divide the dividend per share by the price per share.

Dividend per share = $0.10 
Price per share on Dec 31, 2004 = $14.44 
Price per share on Jan 26, 2005 = $13.58

Dividend yield = (Dividend per share/Price per share)*100 
Dividend yield = ($0.10/$14.44)*100 = 0.69% (rounded to 0.70%)

Therefore, the closest dividend yield for this period is 0.70%, which is option C.

Use the Table for the Question(s)below