The following information is available for Dorman Company: Which of the following statements is correct?
A) The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks.
B) The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments.
C) The dividend yield is 16.7%, which is of interest to bondholders.
D) The dividend yield is 16.7% which is an important measure of solvency.

Question

The following information is available for Dorman Company:  Which of the following statements is correct?
A) The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks. 
B) The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments. 
C) The dividend yield is 16.7%, which is of interest to bondholders. 
D) The dividend yield is 16.7% which is an important measure of solvency.

Quizplus · Accepted Answer

The information provided mentions only the dividend yield, which is a measure of the percentage return an investor can expect from a stock through dividends. Therefore, option B is correct as the dividend yield is of special interest to investors seeking to earn revenue on their investments. Option A is incorrect because it wrongly assumes that investors are seeking an increase in market price rather than revenue. Option C is incorrect because bondholders are not mentioned and the dividend yield is not relevant to them. Option D is incorrect because the dividend yield is not a measure of solvency, which evaluates a company's ability to pay its debts.

The Following Information Is Available for Dorman Company: Which