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Silicon Ltd. has a current stock price of $60.6 per share, is expected to pay an annual dividend of $2.6 in one year, and its expected price right after paying that dividend is $49. What is the expected dividend yield for Silicon Ltd.?

Question

Silicon Ltd. has a current stock price of 60.6pershare,isexpectedtopayanannualdividendof60.6 per share, is expected to pay an annual dividend of 2.6 in one year, and its expected price right after paying that dividend is $49. What is the expected dividend yield for Silicon Ltd.?

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Solution

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

Step 1: Identify the annual dividend. In this case, it is $2.6.

Step 2: Identify the current stock price. In this case, it is $60.6.

Step 3: Divide the annual dividend by the current stock price.

So, the calculation would be:

2.6(annualdividend)/2.6 (annual dividend) / 60.6 (current stock price) = 0.0429

To express this as a percentage, we multiply by 100.

0.0429 * 100 = 4.29%

So, the expected dividend yield for Silicon Ltd. is 4.29%.

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