Why Dividend Yield Can Suddenly "Explode"Dividend yield is calculated by dividing the annual dividend by the company's share price. Hence, a yield can suddenly "explode" because dividends have risen or share prices have fallen sharply. Here are four red flags that all investors should watch out for in massive dividend payouts:Red Flag #1: The Dividend Isn't Covered by EarningsWhen a dividend payout ratio exceeds 100%, the company is paying out more than it earns and could be relying on cash reserves or debt to maintain dividends. Investors should also be wary of one-off profits like tax benefits, which can inflate earnings and make the payout ratio appear healthier. Dividends are funded with cash, making operating cash flow (OCF) and free cash flow (FCF) critical indicators of dividend sustainability.