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what does a stock pays a dividend of 3% mean?
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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.
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