Question 24 (3 points) Alexander is considering an investment in Sani-Worx (SW). If SW is trading at $44 a share. It the company's current dividend is $8.60 a share, what is SW's dividend yield? What is does a high dividend yield reflect about the company?

Dividend yield             = Dividend per share / Current share price * 100

                                    = (8.6 / 44) * 100

                                    = 19.55%

Dividend Yield: Dividend yield is a financial ratio which tells us the relationship of dividend income in comparison to the current price of the stock. A high dividend yield ratio reflects that the company is paying a high dividend per share as compared to the market price of share which is a positive indicator and attractive investment opportunities for the Investors.

But sometimes dividends are not raised; the yield will rise by decrease in the price of the stock. It's important for investors to keep in mind that higher dividend yields do not always indicate attractive investment opportunities so they need to be analyzed more before making the investments.