alleryDividends per share are $0.96 and the market price per share is $70.00. What is the dividend yield (to one decimal)?
A0.7%
B1.4%
C7.3%
D2.5%
Answer & Solution
Correct answer: B. 1.4%
1. Dividend yield = dividends per share / market price per share.
2. = $0.96 / $70.00.
3. = 0.0137 = 1.4%.
4. Trap: 0.7% (option B) inverts something or uses double the price; the divisor is the $70 market price.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §7.3.4 "Dividends Yield", p.312_
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