The annual amount of cash dividends distributed to common shareholders relative to the common stock's market value is the:
A)Dividend payout ratio.
B)Dividend yield.
C)Price-earnings ratio.
D)Current yield.
E)Earnings per share.

Question

Quizplus · Accepted Answer

The dividend yield is defined as the annual amount of cash dividends distributed to common shareholders relative to the common stock's market value. It is expressed as a percentage and helps investors to evaluate the potential return on their investment in the form of dividends. The dividend payout ratio, price-earnings ratio, current yield, and earnings per share are all other metrics used to evaluate stocks, but they are not directly related to the annual amount of cash dividends relative to market value.

The Annual Amount of Cash Dividends Distributed to Common Shareholders