Asked by Bobby Ramoz on May 04, 2024
Verified
Dividend yield on common stock is calculated as
A) dividends on common stock, divided by shares of common stock outstanding
B) net income minus preferred dividends, divided by shares of common stock outstanding
C) dividends per share of common stock, divided by earnings per share
D) dividends per share of common stock, divided by market price per share of common stock
Dividend Yield
A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.
Common Stock
Represents ownership shares in a corporation, giving holders a claim on part of the company’s assets and earnings.
Net Income
Total income of the company after expenses, taxes, and any other costs are deducted from its revenue.
- Grasp the concepts and calculations related to earnings per share and dividend yield.
Verified Answer
NO
Nakeisha oltonMay 09, 2024
Final Answer :
D
Explanation :
Dividend yield on common stock is calculated as dividends per share of common stock divided by market price per share of common stock. Choice A is simply calculating the dividend per share, while choice B is calculating earnings per share. Choice C is dividing dividends per share by earnings per share, which is not relevant to calculating the dividend yield.
Learning Objectives
- Grasp the concepts and calculations related to earnings per share and dividend yield.