The following information is available in respect of a firm: Capitalization Rate : 10% Earnings per Share : Rs. 50 Assume rate of return on investments: a. 12% b. 8% c. 10% Show the effect of dividend policy on market price of shares applying Walter's formula when dividend pay-out ratio is: a. 0% b. 20% c. 40% d. 80% e. 100%

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Q: Vijay

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Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.