1

Does it mean the company pays 3% of the total earnings to the stock holders? So if I have a stock that has 1$ EPS I would receive 3 cents?

12

It means a 3% return on the value of the stock. If a stock has a $10 share price, the dividend would be $0.30.

Normally though, the dividends are announced as a fixed amount per share, because the share price fluctuates. If a percentage were announced, then the final cost would not be known as the share priced could change radically before the dividend date.

  • Clarification - aren't dividends stated and issued quarterly? e.g. A $1 dividend per year announced as $.25. – JoeTaxpayer Nov 3 '11 at 16:23
  • 2
    There can be any number of dividends per year, but typical practice is four quarterly dividends of equal amounts. The yield, which is what "a dividend of 3%" is called, is always given as an annual percentage of the current price. Since the price fluctuates daily, the yield (dividend percentage) also fluctuates daily. – mgkrebbs Nov 3 '11 at 19:14
  • @mgkrebbs actually that depends on the county and company 2 dividends a year is common in the UK- its only some of the big Investment trusts that do quarterly – Pepone May 6 '15 at 22:45

protected by Ganesh Sittampalam Sep 6 '17 at 8:39

Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).

Would you like to answer one of these unanswered questions instead?

Not the answer you're looking for? Browse other questions tagged or ask your own question.