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ret5hd

(20,435 posts)
4. Question about dividend calculations:
Sat Aug 27, 2016, 05:59 AM
Aug 2016

I'm not sure how to even ask the question.

Scenario: Say a stock has been at $10 for years (unrealistic, I know) and has payed a dividend of $1/yr for those years. Therefore, the dividend has been 10% for those years.

1) I buy this stock at $10 and then it miraculously goes to $100. Then later, I get a dividend of $1. Do I calculate my dividend as 10% or 1%?

2) Same setup as question #1, but I get a dividend of $2. Does this count as the company raising their dividend or lowering it? Would this company get dropped by a plan using the DSIP that you mentioned above?

TIA for answering my simplistic questions.

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