Determine the annual dividend and the annual yield to the nearest hundredth of a percent.
Joyce buys 350 shares of KOW, Inc, that has a high of 42.50 per share and a low of 23.60. Last year the company paid annual dividends of $0.58 per share. (a) What is the total annual dividend (b) annual yield based on the low and (c) annual yield based on the high?
To determine the annual dividend and the annual yield, we need to perform the following calculations:
a) Total Annual Dividend:
The annual dividend per share is given as $0.58. Since Joyce bought 350 shares, we can calculate the total annual dividend by multiplying the annual dividend per share by the number of shares:
Total Annual Dividend = Annual Dividend per Share × Number of Shares
Total Annual Dividend = $0.58 × 350
b) Annual Yield Based on the Low:
The annual yield based on the low price is the ratio of the annual dividend to the stock's low price:
Annual Yield based on the Low = (Annual Dividend per Share / Low Price) × 100
Annual Yield based on the Low = ($0.58 / $23.60) × 100
c) Annual Yield Based on the High:
Similarly, the annual yield based on the high price is the ratio of the annual dividend to the stock's high price:
Annual Yield based on the High = (Annual Dividend per Share / High Price) × 100
Annual Yield based on the High = ($0.58 / $42.50) × 100
Now, let's perform these calculations to get the answers to each part of the question.