Dividend Yield The market price for Macro Corporation closed

Dividend Yield The market price for Macro Corporation closed at $40.98 and $59.00 on December 31, current year, and previous year, respectively. The dividends per share were $0.50 for current year and $0.59 for previous year. Determine the dividend yield for Macro on December 31, current year, and previous year. Round percentages to two decimal places. Current year % Previous year % b. The dividend yield increased from the previous year to the current year. This is a result of a(n) increase in the dividend relative to stock price.

Solution

Solution a:

Dividend yield = Dividend per share / Current stock price

Current year = $0.50 / $40.98 = 1.22%

Previous year = $0.59 / $59 = 1.00%

Solution b:

The dividend yield increased from the previous year to the current year. This is a result of an increase in the dividend relative to stock price.