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EMI, CAGR & Depreciation · Question 38 of 66

What is the dividend yield on the investor's purchase price of ₹240 a share?

Question 38

EasyOriginal question

An investor buys 50 shares at ₹240 each. During the year the company pays a dividend of ₹6 a share, and at the end of the year the investor sells all 50 shares at ₹252 each.

What is the dividend yield on the investor's purchase price of ₹240 a share?

Options for question 38

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. Dividend yield is the dividend on a share as a percentage of its price.

  2. 6240×100=2.5%\frac{6}{240} \times 100 = 2.5\%.

Worth noting

6% reads the ₹6 dividend as a percentage.

Concept
Dividend yield
Typical time
90 s
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The rule this testsRate of return and CAGR
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