Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Kate owns a stock with a market price of $31 per share. This stock pays a constant annual dividend of $0.60 per share. If the
Kate owns a stock with a market price of $31 per share. This stock pays a constant annual dividend of $0.60 per share. If the price of the stock suddenly increases to $36 a share, you would expect the: I. dividend yield to increase. II. dividend yield to decrease. III. capital gains yield to increase. IV. capital gains yield to decrease.
| I only |
| II only |
| III only |
| I and III only |
| II and IV only
I got this answer wrong, so I'm just trying to figure out the right answer. Can you explain the answer as well? Thank you. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started