Asked by Callie Idell on Jun 26, 2024
Verified
All else constant, a decrease in the stock price will increase the dividend yield of a stock
Dividend Yield
The proportion of a firm's yearly dividend payouts relative to its stock price.
Stock Price
The cost of purchasing a share of a company on the stock market.
- Acquire knowledge on how changes in dividends, growth rates, and required returns affect stock prices.
Verified Answer
LB
Lillian BauerJul 01, 2024
Final Answer :
True
Explanation :
Dividend yield is calculated as the annual dividends per share divided by the price per share. If the stock price decreases while the dividend remains constant, the dividend yield increases.
Learning Objectives
- Acquire knowledge on how changes in dividends, growth rates, and required returns affect stock prices.