The ABC's dividend yield when the ABC reports dividends per share of $1.40 and net income for the year of $140,000. The current stock price is $14.00 is 10%.
The yield on a security is defined as the measurement of the ex-ante instrument to a safety holder in financing.
It is a cardinal part of the return on an investment, with some other being the change in the security's market price.
The formula of calculating the yield is:
[tex]\text{Dividend Yield} =\dfrac{ \text{Dividend Per Share}}{\text{Current Stock Price}} \times 100[/tex]
According to the given information,
Dividend Per Share= $1.40,
Net Income= $1,40,000
Current Price= $14
Now, apply the formula in the given formula,
[tex]\text{Dividend Yield} =\dfrac{ \text{Dividend Per Share}}{\text{Current Stock Price}} \times 100\\\\\text{Dividend Yield} =\dfrac{1.40}{\$14}\times 100\\\\\text{Dividend Yield} =10\%[/tex]
Therefore, ABC's dividend yield is 10%.
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