Question

The annual dividend yield is computed by dividing _____ annual dividend by the current stock price.

Multiple Choice

this year's

last year's

next year's

the past 5-year average

the next 5-year average

Answer 1

Dividend yield is computed as shown below:

= Dividend per share / current stock price

Now the dividend per share in the above formula stands for next year's dividend.

So, the correct answer is option of next year's dividend

The other options of this year's, last year's, the past 5 year average and the next 5 year average does not have relevance while computing dividend yield.

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