Dividend yield: Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price. Dividend yield is calculated as under – D i v i d e n d Y i e l d = A n n u a l c a s h d i v i d e n d p e r s h a r e M a r k e t v a l u e p e r s h a r e Income stock: Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders. Growth stock: Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options. Requirement 1 To compute: Dividend yield for – 1. Company 1 2. Company 2 3. Company 3 4. Company 4

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Conclusion

Thus, the dividend yield for all the companies have been calculated.

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.

Conclusion

Thus, the stock of Company 4, will not be classified as income stock.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Do fast answer of this accounting questions

Country Selection for your Portfolio Project First, review the Portfolio Project description and the grading rubric in the Module 7 folder. Then, choose a country you will study and become an expert in as you prepare for the final project. Once you have selected a country, select a product that is currently not available there. This country-product combination will be the focus of your Portfolio Project. There can be only one person per country. So post early to ensure you get your country choice. It is best if we have representation from different regions of the world (e.g., Africa, Asia-Pacific, Europe, Latin/Caribbean, the Middle East/North Africa, and Canada), so be aware of countries that have already been selected. Helpful Hint: The World FactbookLinks to an external site. is an excellent resource to use when deciding which country you want to study. You should respond to the product or service choice selection posted commenting on initial thoughts about appropriateness to the…

For this discussion, address the questions below: Choose a global company that you feel does an excellent job of marketing its products and services. Discuss your perception of how the company avoids self-reference criterion to market effectively to different regions. You can structure your answer in the following manner: start your post with a well-developed paragraph to explain why you selected this company for this assignment. In the next paragraph, describe what you think drives this company's marketing strategy success. The third paragraph should discuss your perception of how the company avoids self-reference criterion to market effectively to different regions. Your fourth paragraph should focus on how you think the company avoids ethnocentric behavior in international markets where they are present.

Answer 2

Question

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Conclusion

Thus, the dividend yield for all the companies have been calculated.

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.

Conclusion

Thus, the stock of Company 4, will not be classified as income stock.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Conclusion

Thus, the dividend yield for all the companies have been calculated.

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.

Conclusion

Thus, the stock of Company 4, will not be classified as income stock.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Conclusion

Thus, the dividend yield for all the companies have been calculated.

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.

Conclusion

Thus, the stock of Company 4, will not be classified as income stock.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Conclusion

Thus, the dividend yield for all the companies have been calculated.

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.

Conclusion

Thus, the stock of Company 4, will not be classified as income stock.

Answer 6

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Conclusion

Thus, the dividend yield for all the companies have been calculated.

Answer 7

Chapter 13, Problem 15E

To determine

Concept Introduction:

Dividend yield:

Dividend yield can be defined as the measure in which the cash dividend is expressed as a percentage of the current market price. This is calculated in order to know the return earned or the yield generated by the share depending on their current market price.

Dividend yield is calculated as under $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

Income stock:

Income stock is the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

Growth stock:

Growth stock can be defined as the stock, when not much income is distributed to the stockholders rather most of the income is kept for operations or future options.

Requirement 1

To compute:

Dividend yield for $-$

1. Company 1

2. Company 2

3. Company 3

4. Company 4

Answer 8

Expert Solution

Answer to Problem 15E

Solution:

Dividend yield for $-$

1. Company 1 = 7.30%

2. Company 2 = 10.5%

3. Company 3 = 5.5%

4. Company 4 = 0.6%

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The above answers can be explained as under $-$

Dividend yield is calculated as $-$

$D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e}$

The dividend yield for each company is $-$

Company 1

Given,

• Annual cash dividend per share = $ 16.06

• Market value per share = $ 220

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 16.06}{$ 220} \\ D i v i d e n d Y i e l d = 7.30 % \end{array}$

Company 2

Given,

• Annual cash dividend per share = $ 13.86

• Market value per share = $ 132

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 13.86}{$ 132} \\ D i v i d e n d Y i e l d = 10.5 % \end{array}$

Company 3

Given,

• Annual cash dividend per share = $ 3.96

• Market value per share = $ 72

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 3 .96}{$ 72} \\ D i v i d e n d Y i e l d = 5.5 % \end{array}$

Company 4

Given,

• Annual cash dividend per share = $ 0.48

• Market value per share = $ 80

$\begin{array}{l} D i v i d e n d Y i e l d = \frac{A n n u a l c a s h d i v i d e n d p e r s h a r e}{M a r k e t v a l u e p e r s h a r e} \\ D i v i d e n d Y i e l d = \frac{$ 0 .48}{$ 80} \\ D i v i d e n d Y i e l d = 0.6 % \end{array}$

Answer 13

Conclusion

Thus, the dividend yield for all the companies have been calculated.

Answer 14

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.

Conclusion

Thus, the stock of Company 4, will not be classified as income stock.

Answer 15

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock

Answer 16

Expert Solution

Answer to Problem 15E

Solution:

Stock which would not be classified as an income stock is Company 4’s stock.

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

The above answer can be explained as under as the dividend yield is very low i.e. 0.6%. 0.6% is very less when compared with industry yields, and income stocks are the stock which has a steady or a return or a yield which can be equal to near to the current market yields. Income stocks means regular dividends are paid as per the industry or an appropriate amount income is distributed among the shareholders.

So, the stock of Company 4, will not be classified as income stock.