In 2011,the dividend yield on Microsoft (MSFT)stock rose from 1.97% to 3.10%.Which of the following would have generated that result?

Question

Quizplus · Accepted Answer

The dividend yield is calculated by dividing the annual dividend per share by the stock price. Therefore, if the dividend yield increases, it means that the dividend per share has either increased or the stock price has decreased. Since the stock price of Microsoft is not mentioned to have decreased, the only likely reason for the increase in dividend yield is that Microsoft increased the dividend it would pay per share. Therefore, choice B is the best answer.

In 2011,the Dividend Yield on Microsoft (MSFT)stock Rose from 1