Yesterday's dividend yield
at Hewlett Packard was
1.49%. If HP's annual
dividend is $0.44 and its
closing stock price today
was up 7.25%, what is
Hewlett Packard's
dividend yield today?

Respuesta :

Answer:

  1.39%

Step-by-step explanation:

You want to know today's dividend yield if it was 1.49% yesterday, and today's stock price is up 7.25% over yesterday.

Yield

The dividend yield is the ratio of dividend to stock price. Yesterday, that was ...

  D/P = 1.49%

Today's price is 7.25% more than it was yesterday, so the yield today is ...

  D/((1 +7.25%)P) = (D/P)·(1/1.0725)

  = 1.49%/1.0725 ≈ 1.39%

HP's dividend yield today is about 1.39%.

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Additional comment

Yesterday's stock price was $0.44/0.0149 ≈ $29.53. Today's price is 7.25% higher, about $31.67. The yield today is $0.44/$31.67 ≈ 1.39%.

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