If the Price of a Stock Is $50, the Dividend

question 81

Multiple Choice

If the price of a stock is $50, the dividend is $5, and the stock price has risen $2 in the past year, the dividend yield is

• A)$5.
• B)10 percent.
• C)4 percent.
• D)7 percent.
• E)$7.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, usually with fixed dividends.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

No Par Common Stock

Shares issued without a nominal or face value, where the value is determined by the price investors are willing to pay.

Stated Value

A value assigned to no-par value stock by the corporation's board, not based on market price but used for accounting purposes.