Answer to Question #197392 in Finance for samikh

Question

Flare Stock will pay the dividend of $2.4 this year. Its dividend yield is 10%. At what price is the stock selling?

Answer 1

The dividend amount that is paid to the investors by the company, represented in percentage form is term as the dividend yield.

Computation of the selling price:

$Selling \;price = \frac{Dividend}{Dividend \; yield} \\ = \frac{2.4}{0.1} \\ = 24$

Hence, the selling price of the stock is $24.