What is the formula for calculating current dividend yield?

The current dividend yield is a financial ratio that indicates how much a company pays out in dividends each year relative to its stock price. To calculate the dividend yield accurately, you want to measure the annual dividend payments that an investor can expect to receive from owning one share of the stock.

The correct formula involves taking the annual dividend payment amount and dividing it by the current stock price. The rationale behind option C is that it calculates the annual dividend by taking the quarterly dividend amount and multiplying it by 4 (since there are four quarters in a year). This gives you the total annual dividends before you divide by the stock price to get the yield.

Using the correct formula allows investors to assess the yield they will receive relative to the price they pay for the stock, which is critical for making investment decisions.

Other options may not properly address the necessary calculations needed for the yield:

• Dividing a quarterly dividend by the stock price (as stated in the first option) does not provide an annualized view, which is crucial for yield comparison.
• Simply dividing an annual dividend by the stock price (as per the second option) could be accurate if the annual dividend is directly known, but does not reflect the situation where only the quarterly dividend is available.
• Multip