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Student

Date

Period

12-4

Computing the Dividend and Yield of a Stock Investment

A stock dividend is money you receive as a shareholder of the company. The yield, expressed as a percentage of the price of the stock, is your annual return for holding a stock.

Example Find the total annual dividend and the annual yield to the nearest thousandth percent.

Morgana LeFey purchased 50 shares of company stock at $147.00 per share. The company paid annual dividends of $2.97 per share.

1. Find the total annual dividend. Total Annual Dividend Annual Dividend per Share Number of Shares $2.97 50 $148.50 total annual dividend

2. Find the annual yield. Yield Annual Dividend per Share Cost per Share $2.97 $147.00 2.020% yield

Practice

Find the annual yield.

Annual Divide per Share

nd

Cost per Share

Annual Yield

1.

$0.96

$ 57.72

2.

3.07

191.54

3.

0.75

37.85

4.

1.39

122.63

  • 5.

    Al Holman purchased 75 shares of company stock at $37.75 per share. Last year the company paid annual dividends of $1.02 per share. What were Holman’s annual dividends? What was his annual yield?

  • 6.

    Marybeth Evanston purchased 2,000 shares of airline stock at $3.15 per share. The company recently paid annual dividends of $0.09 per share. What are Evanston’s annual dividends? What is her annual yield?

  • 7.

    Felix Capistrano bought 30 shares of oil stock at $45 per share. He recently read that the average selling price of his stock was $51.72. The company paid annual dividends of $1.15 per share last year. What is his annual yield? What would his annual yield be if he had bought the stock at its current average selling price?

  • 8.

    Standardized Test Practice Robert Masterson bought 99 shares of stock at a price of $55 per share and 150 shares at $52 per share. The annual dividend per share was $1.27. What is

M a s t e r s o n s a v e r a g e a n n u a l y i e l d ?

A. 2.309%

B. 2.442%

C. 2.374%

D. 2.388%

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Section 12-4

Study Guide

83

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