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 $–$

$DividendYield=\frac{Annualcashdividendpershare}{Marketvaluepershare}$

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

To determine

Requirement 2

To classify:

Stock which would not be classified as an income stock