Upon adding the 2% dividend (assuming no compounding), the stock would have underperformed the reference rate by 13%.The risk premium taken by investing in the stock would be -15% (i.e. a negative equity risk premium of 15%).For example, if a given company’s stock produced a loss of -10% over 1 year, its reference rate was +5%, and the stock held a dividend yield of +2%:Periodic income, while not always guaranteed, can reflect the consistent return attributable to an underlying investment.This premium refle ...