Question

Dividend yield is: Select one: a. Next year’s expected dividend divided by market price of share...

Dividend yield is:

Select one:

a. Next year’s expected dividend divided by market price of share

b. Next year’s expected dividend divided by book value of share

c. Next year’s expected dividend divided by Next year’s market price of share

d. Current dividend divided by book value of share

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Answer #1

Dividend yield=Next year's dividend/Current price of share

This yield shows annual payments of dividends to shareholders of the company as a % of the current market price of the company.

Also Dividend yield+Capital gains yield=Total return of stock.

Hence the correct option is:

a. Next year’s expected dividend divided by market price of share

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