True or False? 1. Dividend yield measures the rate of return on the market price of...
True or False?
1. Dividend yield measures the rate of return on the
market price of a share. True or False?
2. The dividend payout ratio measures the percentage of profit paid
out in dividends to ordinary shareholders. True or False?
3. Dividend per share is the ratio to use when comparing income
from shares with income yield from alternative investments. True or
False?
4. Dividend yield is an important ratio for an investor who is
acquiring shares mainly for income. True or False?
Homework Answers
1). False, Dividend yield is the financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the market value per share. It is computed by dividing the dividend per share by the market price per share and multiplying the result by 100
2). False, The dividend payout ratio measures the percentage of net income that is distributed to shareholders in the form of dividends during the year
3). False, Dividend per share (DPS) is the sum of declared dividends issued by a company for every ordinary share outstanding. The figure is calculated by dividing the total dividends paid out by a business, including interim dividends, over a period of time by the number of outstanding ordinary shares issued
4). True, The dividend yield ratio is an important consideration for investors since it represents the annualized return a stock pays out in the form of dividends.
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True or False?
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Dividend yield is most often computed for common stock a. because the preferred stock market price...
Dividend yield is most often computed for common stock a. because the preferred stock market price per share is always lower than common stock, causing an inflated dividend yield. b. because common stock dividends are always lower than preferred stock dividends and present the most conservative estimates of dividend yield. c. because the cash dividends paid on common stock normally vary with the profitability of the corporation. d. because the preferred stock dividends vary with the profitability of the corporation....
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