A share of Southside stock sold for $37. The annual dividend is $1.85. Three years later the stock has increased 17% in value, and the dividend has increased 5%.
a. What is the price per share three years later?
b. What is the dividend three years later?
c. What is the yield 3 years later? Round to the nearest tenth of a percent
a. To find the price per share three years later, first calculate the increase in value:
Original price per share: $37
Increase in value: $37 * 17% = $37 * 0.17 = $6.29
Price per share three years later: $37 + $6.29 = $43.29
b. To find the dividend three years later, first calculate the increase in the dividend:
Original dividend: $1.85
Increase in dividend: $1.85 * 5% = $1.85 * 0.05 = $0.0925
Dividend three years later: $1.85 + $0.0925 = $1.9425
c. To find the yield three years later, divide the dividend three years later by the price per share three years later and then multiply by 100 to get a percentage:
Yield three years later: ($1.9425 / $43.29) * 100 ≈ 4.5%
Therefore, the price per share three years later is $43.29, the dividend three years later is $1.9425, and the yield three years later is approximately 4.5%.