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:

Account

A record that keeps track of financial transactions for a specific purpose, such as savings, checking, or investment dealings.

Tax Shield Approach

A method to reduce taxable income through allowable deductions, reducing overall tax liability.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on its income.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.