How To Earn $500 Per Month From Coca-Cola Stock (NYSE: KO)

Coca-Cola Co. KO was priced at $58.67 at the end of trading hours on Dec.1. With a market capitalization of $256.6 billion, the stock price fluctuated between a 52-week high of $64.99 and a 52-week low of $51.55. 

Coca-Cola has a dividend yield of 3.14%. In October, the company's board declared a dividend of $0.46 per share payable on Dec.15. In the nine months ending Sept. 29, the dividend expenses were $4.078 billion, $168 million more than the dividend payments for the same period last year. 

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How Can You Earn $500 Per Month As A Coca-Cola Investor?

Assuming your target is to make $500 per month — $6,000 annually — from Coca-Cola Co.'s dividends, you must invest about $191,083. At $58.67 a share, this translates to holding about 3,257 shares. But if you reduce your target to $100 per month, the investment value is $38,217 or 652 shares.

Estimating the investment value from dividend yields: Your investment value estimate can be derived using two key variables — the desired annual income of $6,000 or $1,200 — and the dividend yield, which is 3.14% for Coca-Cola Co. 

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To earn $500 per month, your investment is close to $191,083 ($6,000 / 0.0314) and $38,217 ($1,200 / 0.0314) if you opt for a moderate $100 monthly income.

An important note on investment value estimation: The dividend yield can change over time. This change can be attributed to the movement in stock prices as well as the dividend payments over time. These calculations have not considered the appreciation or a drop in the price of Coca-Cola stock. Assuming that the stock price does not fluctuate or the capital appreciation is not factored into the calculations, the dividend value and its yield are positively correlated. 

Assume a stock paying $2 as an annual dividend is trading at $50. The dividend yield would be $2/$50 or 4%. When the stock price jumps to $60, the dividend yield drops to $2/$60 or 3.33%. If the stock price falls to $40, this will trigger an inverse effect and increase the dividend yield to 5% ($2/$40). As fluctuations in stock price impact the yield, changes in the company's dividend policies also affect the yield.

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