An investor who currently holds 582 shares because he created a dividend by selling 18 shares has done the equivalent of a:
A)3% increase in dividend yield.
B)3.5% increase in dividend yield.
C)3% decrease in dividend yield.
D)3% increase in ownership of the company.

Question

Quizplus · Accepted Answer

Selling 18 shares out of 600 originally held (582 remaining implies 600-18=582) to create a dividend is equivalent to a 3% action (18/600 = 0.03), which increases the effective dividend yield by redistributing the dividends of the sold shares across the remaining shares.

An Investor Who Currently Holds 582 Shares Because He Created