Low dividend yields are seen:

Question

Quizplus · Accepted Answer

When firms have good investment opportunities, they tend to reinvest their earnings back into the company rather than paying out dividends to shareholders. This leads to a lower dividend yield. Option A is incorrect because high interest rates would increase the demand for high-yielding stocks, leading to an increase in dividend yields. Option C is incorrect because a stock market downturn can lead to higher dividend yields as investors turn to stable, income-producing stocks. Option D is incorrect because corporations with low growth opportunities are more likely to pay out dividends to attract investors.

Low Dividend Yields Are Seen