The Dividend Yield on a Stock Will Increase If The

question 102

Multiple Choice

The dividend yield on a stock will increase if the:

• A)dividend growth rate decreases.
• B)stock price decreases.
• C)capital gains rate decreases.
• D)stock price increases.
• E)tax rate on dividends increases.

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Definitions:

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowings of the company.

Dividends

A distribution of a portion of a company's earnings to its shareholders, usually determined by the board of directors.

Operating Activities

Cash flows directly related to the production and delivery of a company's goods and services.

Direct Method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.