Sorry - I just spotted a typo -

If the stock were to rise to $15 or drop to $5, the dividend yield changes only for new purchases. YOU still have a cost basis of $10, so any payouts will be based on your $10 per share cost. That is YOUR personal rate. If the company raises its payout to $2, you would now be receiving $2 on a $1 investment, and YOUR rate would then climb to 20%. But this is based on a change in the payout amount, not a change in the stock price.


This should really say

If the company raises its payout to $2, you would now be receiving $2 on a $10 investment, and YOUR rate would then climb to 20%.