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Dividend Yield = Annual Dividend / The Current Price of the Common Stock True False

Question:

Dividend Yield = Annual Dividend / The Current Price of the Common Stock

True

False

Ratios:

Common ratios assess liquidity, leverage, profitability, return, and efficiency of an operation. Ratios are widely utilized by investors and financial institutions to determine resiliency and capacity.

Answer and Explanation:


The answer is True.


The dividend yield ratio assesses the comparison of a company's annual dividend to the current per-share price of common stock. The ratio is useful but should be utilized with other ratios for analysis purposes because the ratio can be skewed in periods of declining stock prices. The ratio is presented as a percentage of current stock prices.


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What Is Dividend Yield? - Definition & Calculation

from Corporate Finance: Help & Review

Chapter 2 / Lesson 10
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