The Formula for Computing the Dividend Yield Is

question 3

Multiple Choice

The formula for computing the dividend yield is

• A)annual dividend per share of common stock/market price per share of common stock.
• B)market price per share of common stock/earnings per share.
• C)total stockholders' equity/number of shares of outstanding common stock.
• D)(net income - preferred dividends)/number of shares of outstanding common stock.

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Definitions:

Straight-Line Amortization

A method of systematically reducing the book value of an intangible asset over its useful life by allocating equal amortization expenses each period.

Bond Interest Expense

The cost a company incurs for borrowing money through issuing bonds, represented as interest payments to bondholders.

Annual Interest

The interest amount accumulated over one year on borrowed funds or investments.

Effective-Interest Method

A way of calculating the amortized cost of a bond and the amount of interest expense over its life, reflecting the constant rate of interest over the period.