The following information is available for Meyer Company:? $\begin{array}{lr}
\text { Dividends per share of common stock } & \$ 1.80 \
\text { Market price per share of common stock } & \$ 30.00
\end{array}$ Which of the following statements is correct?
A) The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks.
B) The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments.
C) The dividend yield is 16.7%, which is of interest to bondholders.
D) The dividend yield is 16.7%, which is an important measure of solvency.

Question

Quizplus · Accepted Answer

The dividend yield is calculated as (Dividends per share / Market price per share) * 100 = (1.80 / 30.00) * 100 = 6.0%. This yield is of interest to investors seeking income from their investments, not necessarily an increase in the market price of their stocks or solvency measures.