So your annual income will be $5.20/share & your total value is probably the market price of the share, $40.20.
Therefore,
Capitalisation Rate = 5.20 / 40.20
= 0.1293 or 12.93%
What this rate indicates in this case is the potential return through dividends that the investor will get by purchasing Company Y stocks.
If you are looking for MARKET CAPITALISATION however, like one of the previous answers states; you need the number of shares outstanding.
Market Cap = Share Price X Shares Outstanding.
Market capitalization is the share price times the number of shares outstanding. Don't know based on information you gave, the dividend rate and (plow back?) of earnings doesn't matter.
Company Y does not plow back any earnings and is expected to produce a level dividend stream of $5.2 a share. If the current stock price is $40.2, what is the market capitalization rate?
