An increase in the market price of a company's common shares will immediately affect which of the following?

Question

Quizplus · Accepted Answer

An increase in the market price of a company's common shares will immediately affect the dividend yield ratio, as this ratio is calculated by dividing the annual dividends per share by the market price per share. As the market price increases, the dividend yield decreases if the dividend amount remains constant.

An Increase in the Market Price of a Company's Common