Winter's just declared an increase in its annual dividend from $.82 a share to $.85 a share.If the stock price should remain constant,then
A)the capital gains yield would decrease.
B)the capital gains yield would increase.
C)the dividend yield would remain constant.
D)the dividend yield would increase.
E)neither the capital gains yield nor the dividend yield would change.

Question

Quizplus · Accepted Answer

If the dividend per share increases while the stock price remains the same, then the dividend yield (dividend per share/stock price) will increase. Therefore, the best choice is D. The capital gains yield (change in stock price/original stock price) will remain the same since the stock price is constant.

Winter's Just Declared an Increase in Its Annual Dividend from $.82