A company that has 25,000 shares of $5.00 par value common stock issued and outstanding paid a dividend of $0.40 per share. The market value of the stock is $16 per share. The company's dividend yield is a. 16% b. 400% c. 40% d. 2.5%

The company's dividend yield is 2.5%

Explanation:

According to the detailed letter we have the following:

A company's dividend yield of $0.40 per share

The market value of the stock is $16 per share.

To calculate the company's dividend yield we have to use the following formula:

dividend yield = dividend/market price

dividend yield = $0.40

$16

dividend yield = 2.5%