Dividend yield on common stock is calculated as
A) dividends on common stock, divided by shares of common stock outstanding
B) net income minus preferred dividends, divided by shares of common stock outstanding
C) dividends per share of common stock, divided by earnings per share
D) dividends per share of common stock, divided by market price per share of common stock

Question

Quizplus · Accepted Answer

Dividend yield on common stock is calculated as dividends per share of common stock divided by market price per share of common stock. Choice A is simply calculating the dividend per share, while choice B is calculating earnings per share. Choice C is dividing dividends per share by earnings per share, which is not relevant to calculating the dividend yield.

Dividend Yield on Common Stock Is Calculated as