What is BigCo's dividend yield if it trades at $30 per share and pays a $0.30 dividend?

To calculate the dividend yield, you divide the annual dividend payment by the price per share. In the case of BigCo, the annual dividend is $0.30 per share, and the share price is $30.

The formula for dividend yield is:

Dividend Yield = (Annual Dividend / Price per Share) * 100%

Plugging in the numbers from the question:

Dividend Yield = ($0.30 / $30) * 100% = 0.01 * 100% = 1%

Thus, the calculated dividend yield is 1%. However, it appears that the provided answer of A (4%) does not align with this calculation.

For further context, it's important to understand that dividend yield gives investors an idea of how much income they can expect from their investment relative to the price they pay for each share. A higher dividend yield may indicate a more attractive return on investment, but it can also reflect the company's stock price relative to its dividends. When evaluating dividend yields, it's also crucial to consider the stability and growth potential of the company's dividends moving forward.