NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
Which statement best describes the dividend yield of a stock?
Dividend yield is the annual dividend per share divided by the current market price of the share. It measures the cash income return an investor gets at today's price, unlike the dividend rate, which uses face value.
- AAnnual dividend per share divided by current market priceCorrect
- BAnnual dividend per share divided by face value
- CEarnings per share divided by market price
- DAnnual dividend per share divided by earnings per share
Explanation
Dividend yield compares annual dividend with the current market price. Dividend divided by face value is the dividend rate, EPS over price is the earnings yield, and dividend over EPS is the payout ratio.
Did you get it right without looking?
One question tells you little. A timed set on Investing in Stocks (NISM XXI-A) shows your real accuracy, how long you take and where you lose marks.
More Investing in Stocks (NISM XXI-A) questions
- Which of the following best describes the effect of a stock split, for example a face value change from ₹10 to ₹2 per share, on a shareholde…
- In the context of equity investing, which of the following is the best description of a 'rights issue'?
- A stock is priced at Rs 400 and its annual earnings per share (EPS) are Rs 25. The company's book value per share is Rs 200. What are its P/…
- A company's shares are quoted at ₹480 and its earnings per share for the last year were ₹32. What is its price-to-earnings (P/E) ratio?
- A company with 10 crore shares outstanding has a net profit of ₹150 crore and pays out ₹60 crore as dividend. If the share trades at ₹300, w…
- A company with 10 crore shares outstanding has a net profit of ₹150 crore, and pays total dividends of ₹45 crore. What is its dividend payou…