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Paying dividend

thanks to both of you for your answers and comments. Appreciate.

 

Think its better to use 'Yield' to assess this.

Yield % = (Divident payout)/(Share Price) x100%



Reason is, when co. quotes % divident, it is based on their par value of the share.

Say, par value is 10cts, but stock is trading @ $1.00,

Then 5% divident is 5% of par value...i.e $0.005 per share and yield is 0.5%.

 

I think its tied to the current price of the stock

 

How is dividend paid? If a new IPO declared 1.00 for the public and targets 6.5% dividend. I believe it means we get 0.065 per share. What happened if two years later the share price increased and somebody bought at 2.00 and this time the dividend declared is again 6.5%. So, is the dividend based on the issue price to the public at 1.00 or ???????
I am thinking of investing into some good counters and I am a newbie in this area. Thanks, to any kind soul that can help me understand.