What kind of information does the dividend yield provide?
A) How much an investor can expect to receive in dividends
B) How often a company pays dividends
C) How much profit each shareholder makes when he sells his shares of stock
D) How much dividend revenue a company earns on its short-term investments

Question

Quizplus · Accepted Answer

The dividend yield provides information on how much an investor can expect to receive in dividends for each share of stock they own. It is calculated as a percentage of the current stock price.

Note: Choice B is incorrect as the frequency of dividend payments is not directly related to the dividend yield. Choice C is incorrect as the amount of profit a shareholder makes when selling their shares depends on the change in stock price, not the dividend yield. Choice D is incorrect as the dividend yield only reflects the dividends paid out by the company, not revenue earned from investments.

What Kind of Information Does the Dividend Yield Provide