Two years ago, you purchased 100 shares of Coca-Cola Company. Your purchase price was $52 a share, plus a total commission of $29 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.55 per share for the first year, and $1.67 per share, the second year. Also assume that at the end of two years, you sold your Coca-Cola stock for $58 a share minus a total commission of $34 to sell the stock.

a. Calculate the dividend yield for your Coca Cola stock at the time you purchased it.

Question

Business

Matilda Hopkins

18 August, 14:44

Two years ago, you purchased 100 shares of Coca-Cola Company. Your purchase price was $52 a share, plus a total commission of $29 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.55 per share for the first year, and $1.67 per share, the second year. Also assume that at the end of two years, you sold your Coca-Cola stock for $58 a share minus a total commission of $34 to sell the stock.

a. Calculate the dividend yield for your Coca Cola stock at the time you purchased it.

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Answers (1)

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Darius Mercer · Answer 1

The answer is: 2.98%

Explanation:

The dividend yield for the stock during the purchase year can be calculated using the following formula:

dividend yield year A = dividend year A / stock price year A

In this case year A is the purchase year.

Dividend yield = $1.55 / $52 = 0.0298 or 2.98%