The annual amount of cash dividends distributed to ordinary shareholders relative to the ordinary share'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

Dividend yield is the annual dividends per share divided by the current market price per share. Dividend payout ratio is the proportion of net income paid out as dividends, price-earnings ratio is the ratio of a stock's market value per share to its earnings per share, current yield is the annual income (dividends or interest) divided by the current market price of the security, and earnings per share is the amount of net income earned per share outstanding. Therefore, the best choice is B.

The Annual Amount of Cash Dividends Distributed to Ordinary Shareholders