Question

At the beginning of the year, an investor buys 1,000 shares of XYZ stock, purchased at $33 per share. Subsequently, the stock rises to $40 by the end of the year and the stock pays a $4 dividend during the year. By the end of the following year, the stock has fallen to $25 and pays the same $4 dividend. What is the stock's dividend yield?A. 4%B. 10%C. 12%D. 16%

Answer 1

Answer: C - 12%

Explanation: Dividend yield is calculated as the annual dividend divided by the share price.

The dividend yield for the stock is calculated as:

= Annual Dividend/ share price

= $4/$33

=12.12

=12%