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31 October, 07:35

A company that has 25,000 shares of $5.00 par value common stock issued and outstanding paid a dividend of $0.40 per share. The market value of the stock is $16 per share. The company's dividend yield is a. 16% b. 400% c. 40% d. 2.5%

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  1. 31 October, 08:49
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    The company's dividend yield is 2.5%

    Explanation:

    According to the detailed letter we have the following:

    A company's dividend yield of $0.40 per share

    The market value of the stock is $16 per share.

    To calculate the company's dividend yield we have to use the following formula:

    dividend yield = dividend/market price

    dividend yield = $0.40

    $16

    dividend yield = 2.5%
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