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Which one of the following must equal zero if a firm pays a constant annual dividend?

Dividend yield

Capital gains yield

Total return

Market value per share

Book value per share



Sagot :

The correct answer is A. Dividend yield. A capital gains yield is the term used to describe how much a security's price, such as common stock, increases.

Divided with the aid of the rate according to proportion, the dividend yield, also known as dividend-rate ratio, is the dividend according to proportion. In addition, it is a company's whole yearly dividend payments divided by its market value, assuming the number of shares is constant.

Capital gain plus dividend yield equals total return.

Dividend yield is calculated as dividend / stock price.

Dividend yield would remain constant if dividend payments were constant.

For instance, if the dividend is 4 and the purchase price was 40

return on dividends = 4/40 = 0.1

The stock's price move represents a capital gain.

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