Which One of the Following Statements Is Correct Concerning the Dividend

question 73

Multiple Choice

Which one of the following statements is correct concerning the dividend yield and the total return?

• A)The dividend yield can be zero while the total return must be a positive value.
• B)The total return can be negative but the dividend yield cannot be negative.
• C)The total return must be greater than the dividend yield.
• D)The total return plus the capital gains yield is equal to the dividend yield.
• E)The dividend yield exceeds the total return when a stock increases in value.

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Definitions:

Indifference Curve

A graph representing combinations of goods or services among which a consumer is indifferent.

Substitution

The process of replacing one good or service with another, often due to changes in relative prices, quality, or availability.

Marginal Rate

A measure of the change in a variable (often cost, revenue, or profit) as it relates to a unit change in another variable.

Substitution

The economic principle describing how consumers or producers switch between goods or resources as relative prices or availability change.