Winslow,Inc. stock is currently selling for $60 a share. The stock has a dividend yield of 2.5%. How much dividend income will you receive per year if you purchase 800 shares of this stock?
A) $20
B) $60
C) $1,200
D) $1,380
E) $1,560

Question

Quizplus · Accepted Answer

The annual dividend income can be calculated as follows:

Dividend yield = annual dividend / stock price

Rearranging the formula, we get:

Annual dividend = Dividend yield x stock price

Substituting the given values, we get:

Annual dividend = 0.025 x $60 = $1.50 per share

So for 800 shares, the annual dividend income will be:

Total dividend income = 800 shares x $1.50 per share = $1,200. Therefore, the best choice is C, $1,200.