Nicer Corporation reported net income of $50,000 in the current year. There are 10,000 shares of $100 par, 6% preferred stock and 50,000 shares of $2 par common stock outstanding. During the year, Nicer paid the preferred stockholders a $6-per-share dividend and also paid $30,000 to common shareholders. The market value of Nicer's stock is preferred stock, $95, and common stock, $5.
(a) Calculate Nicer's dividend yield common stock.
(b) Why does the dividend yield vary widely across firms?

Question

Nicer Corporation reported net income of $50,000 in the current year. There are 10,000 shares of $100 par, 6% preferred stock and 50,000 shares of $2 par common stock outstanding. During the year, Nicer paid the preferred stockholders a $6-per-share dividend and also paid $30,000 to common shareholders. The market value of Nicer's stock is preferred stock, $95, and common stock, $5.​
(a) Calculate Nicer's dividend yield common stock.
(b) Why does the dividend yield vary widely across firms?

Quizplus · Accepted Answer

The Answer of Nicer Corporation reported net income of $50,000 in the current year. There are 10,000 shares of $100 par, 6% preferred stock and 50,000 shares of $2 par common stock outstanding. During the year, Nicer paid the preferred stockholders a $6-per-share dividend and also paid $30,000 to common shareholders. The market value of Nicer's stock is preferred stock, $95, and common stock, $5.​
(a) Calculate Nicer's dividend yield common stock.
(b) Why does the dividend yield vary widely across firms?

Nicer Corporation Reported Net Income of $50,000 in the Current