Question

Francisca purchased 425 shares of Kellogg Company stock at $14.15 apiece. She earns $374.00 in dividends every year. What is the yield on Francisca's Kellogg Company stock?

Answer 1

Her yield on cost is 6.22%.

This is found by dividing the dividend per share by the cost per share. Since she earned $374 on 425 shares, her dividend per share is 374/425=$0.88. Divide this by the cost per share:

0.88/14.15= 0.06219 ≈ 6.22%.