Which of the following statements is FALSE?
A)We must discount the cash flows from stock based on the equity cost of capital for the stock.
B)The dividend yield is the percentage return the investor expects to earn from the dividend paid by the stock.
C)The firm might pay out cash to its shareholders in the form of a dividend.
D)The dividend yield is the expected annual dividend of a stock,divided by its expected future sale price.

Question

Quizplus · Accepted Answer

The statement that the dividend yield is the expected annual dividend of a stock, divided by its expected future sale price is false. The dividend yield is actually the annual dividend per share divided by the current stock price.

Which of the Following Statements Is FALSE