The dividend yield provides information for both common and preferred stockholders.

Question

Quizplus · Accepted Answer

The dividend yield is the ratio of the annual dividend per share to the current market price per share, and it represents the return on investment for stockholders. As such, it is relevant for both common and preferred stockholders, as they both receive dividends and can use the dividend yield as an indicator of the profitability and value of their investment. However, preferred stockholders usually have a fixed dividend rate and priority over common stockholders in receiving dividends, which may affect their perspective on the dividend yield.

The Dividend Yield Provides Information for Both Common and Preferred