The dividend yield ratio helps assess the
A)profitability of the current year.
B)cash return on a shareholders' investment.
C)company's ability to pay its current liabilities as they come due.
D)solvency of a company.

Question

Quizplus · Accepted Answer

The dividend yield ratio is calculated by dividing the annual dividend per share by the current market price per share, and represents the cash return on a shareholder's investment. This makes choice B the best answer, as it directly relates to the purpose of the ratio. Choice A is incorrect as the ratio does not provide information on profitability of the current year, but rather return to shareholders. Choice C is incorrect as it relates to the current ratio, not the dividend yield ratio. Choice D is also incorrect.

The Dividend Yield Ratio Helps Assess the