Recher Corporation's Common Stock Has a Par Value of $3

question 181

Multiple Choice

Recher Corporation's common stock has a par value of $3 per share and has been stable at a total value of $270,000 on the company's balance sheet for several years. The total stockholders' equity at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market price of common stock at the end of the year was $3.76 per share. The company's dividend yield ratio is closest to:

• A)1.7%
• B)17.1%
• C)1.3%
• D)26.3%

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Definitions:

Four-Firm Concentration Ratio

An economic indicator that measures the combined market share of the top four firms in an industry, used to assess the level of competition.

Market Shares

The proportion of total market sales within an industry that is held by a specific company.

Herfindahl Index

A measure of market concentration used to determine the level of competition within an industry by summing the squares of the market shares for each firm.