Your investment goal is to receive a stream of income from your investment. Which of the following would be important information to determine whether a particular stock purchase would suit your plan?

Question

Quizplus · Accepted Answer

The most important information to determine whether a particular stock purchase would suit your plan of receiving a stream of income from your investment is the dividend yield. This is because the dividend yield indicates the amount of dividend income you can expect to receive relative to the stock price. A higher dividend yield implies higher income from the stock, thus making it a more suitable investment for an income-generating portfolio. Factors such as earnings per share, market-to-book ratio, and book value may be relevant for other investment strategies, but not specifically for an income-generating one.

Your Investment Goal Is to Receive a Stream of Income