question archive The Good Life stock is selling for $40 a share and has a current dividend yield of 4 percent
The Good Life stock is selling for $40 a share and has a current dividend yield of 4 percent
Subject:FinancePrice:2.87 Bought7
The Good Life stock is selling for $40 a share and has a current dividend yield of 4 percent. What is the amount of the last dividend paid if the dividend growth rate is 3 percent?
$1414
$1487
$1596
$1553
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Answer:
The amount is computed as shown below:
Dividend yield = Last dividend paid (1 + growth rate) / stock selling price
0.04 = Last dividend paid (1 + 0.03) / $ 40
$ 1.6 / 1.03 = Last dividend paid
$ 1.553 Approximately = Last dividend paid
If there are 1000 shares, then the amount of the dividend will be:
= $ 1.553 x 1,000
= $ 1,553
