Zolo Plc Just Declared That It Is Increasing Its Annual

question 46

Multiple Choice

Zolo plc just declared that it is increasing its annual dividend from £1.00 per share to £1.25 per share.If the share price remains constant, then:

• A)the capital gains yield will decrease.
• B)the capital gains yield will increase.
• C)the dividend yield will increase.
• D)the dividend yield will also remain constant.
• E)neither the capital gains yield nor the dividend yield will change.

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Definitions:

Financial Statements

Reports that summarize the financial performance, position, and cash flows of a business over a specific period.

Owner's Drawings Account

An account used to record withdrawals of assets from a business by the owner for personal use.

Income Summary Account

A temporary account used in accounting to transfer revenues and expenses at the end of an accounting period; its balance is ultimately transferred to retained earnings.

Owner's Capital Account

A line item in a firm's balance sheet that shows the value of the proprietor's invested capital and the accumulated profits retained within the company.