Miranda purchased 425 shares of Dagofi Radar stock at $14.15 apiece. She earns $374.00 in dividends every year. What is the yield on Miranda’s Dagofi Radar stock?
a.
0.0622
b.
6.22
c.
26.4
d.
0.0264
We are asked to evaluate the yield of the whole stock, not just one share. We have that Miranda has paid in total 425*14.15=6013.75$ to acquire the shares (total stock). The yield of an asset is its profit per year over its cost. In this specific case, we have that the yield is 374/6013.75. The result of this calculation is choice a.
