ilmscore | Prediction Details
"Let's say you want to invest in this hypothetical company that is trading for $100 a share and they're paying a 5% annual yield so if you invest $1,000 into this company they'll pay you $50 if you invest $100 into it they'll pay you $5 over the next year Now what you want to pay attention to is how strong the actual company is because let's say this company starts to do really bad they start losing money and they're on the verge of bankruptcy and this stock tanks in price they go from $100 a share to 20 a share because they're doing really bad financially at this point if they have not adjusted their dividends yet it will look as if they're still paying this $5 annual yield right this is how much money they were paying here and assuming they haven't adjusted their dividends it will look like they're paying a $5 annual dividend for a $20 share price of the stock that is what a 25% return on your money"
By Minority Mindset | January 28, 2024 | Pending
From video
How To Start Earning Passive Income With JUST $1,000 (Step-By-Step) 00:09:32 - 00:10:22
Interpreted Prediction
A stock's high dividend yield can be misleading if the company's financial health is poor. A stock trading at $20 that was previously $100, still paying a $5 dividend, would appear to have a 25% yield, masking potential bankruptcy risk.

Prediction Details

Topic
Stock Valuation

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