Understanding Dividend Yield

The video tutorial explains the concept of dividend yield, its calculation, and its significance for investors. It covers the relationship between dividend yield, stock price, and dividends, highlighting the inverse relationship between stock price and dividend yield. The tutorial includes example problems to illustrate these concepts and discusses the impact of quarterly and monthly dividends on yield. It concludes with a calculation of expected earnings from dividends, emphasizing the importance of understanding these factors for investment decisions.

What does a 5% dividend yield indicate if you invest $100 in a stock?

• You will earn $50 annually.

• You will earn $500 annually.

• You will earn $10 annually.

• You will earn $5 annually.

How is the annual dividend yield calculated?

• Annual dividend divided by stock price, multiplied by 100

• Stock price divided by annual dividend, multiplied by 100

• Annual dividend multiplied by stock price, divided by 100

• Stock price multiplied by annual dividend, divided by 100

What happens to the dividend yield if the stock price increases?

• It increases.

• It decreases.

• It remains the same.

• It doubles.

If a stock's price decreases by half, what happens to the dividend yield?

• It triples.

• It doubles.

• It decreases by half.

• It remains unchanged.

What is the annual dividend if a company pays a quarterly dividend of $0.50?

• $3.00

• $4.00

• $2.00

• $1.00

How many times a year is a quarterly dividend paid?

• Once

• Twice

• Three times

• Four times

If a company pays a monthly dividend of $0.20, what is the annual dividend?

• $3.60

• $4.80

• $2.40

• $1.20

What is the dividend yield if the annual dividend is $2.40 and the stock price is $50?

• 4.8%

• 5.0%

• 4.0%

• 3.8%

If an investor buys $10,000 worth of stock with a 4% dividend yield, how much do they earn annually?

• $300

• $500

• $200

• $400

What can cause changes in the expected annual earnings from dividends?

• Neither stock price nor annual dividend changes

• Only changes in stock price

• Changes in stock price and annual dividend

• Only changes in annual dividend