Winter's just declared that it is increasing its annual dividend from $.82 a share to $.85 a share.If the stock price should remain constant,then:
A)the capital gains yield would decrease.
B)the capital gains yield would increase.
C)the dividend yield would remain constant.
D)the dividend yield would increase.
E)neither the capital gains yield nor the dividend yield would change.

Question

Quizplus · Accepted Answer

If the company increases its annual dividend, the dividend yield (dividend amount divided by stock price) will increase. As the stock price remains constant, the capital gains yield (increase in stock price divided by original stock price) will not change. Therefore, the dividend yield will increase.

Winter's Just Declared That It Is Increasing Its Annual Dividend