The expected dividend yield is equal to

Question

Quizplus · Accepted Answer

The expected dividend yield is the ratio of the expected cash dividend to the current stock price. It represents the return on investment that an investor can expect from holding the stock in terms of receiving dividends. Choice A is not correct because the dividend yield cannot be multiplied by next year's stock price to derive the expected dividend yield. Choice C is also not correct because the expected dividend yield is not calculated using next year's stock price. Choices D and E relate to the calculation of the expected growth rate, but not the expected dividend yield.

The Expected Dividend Yield Is Equal to