Beatrice Corporation currently trades at $12 per share from a high of $32. Increasing competition has resulted in declining earnings per share as well. The company however maintains its dividend policy of $1 per share each quarter. The decrease in market prices will result in a decrease in dividend yield.

Question

Quizplus · Accepted Answer

Dividend yield is calculated as the annual dividends per share divided by the price per share. If the price per share decreases while the dividend remains constant, the dividend yield actually increases.

Beatrice Corporation Currently Trades at $12 Per Share from a High