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17 June, 17:02

The following information is available for Meyer Company: Dividends per share of common stock $1.80 Market price per share of common stock $30.00 Which of the following statements is correct? a. The dividend yield is 16.7%, which is an important measure of solvency. b. The dividend yield is 16.7%, which is of interest to bondholders. c. The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments. d. The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks.

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  1. 17 June, 17:12
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    Option (c) is correct.

    Explanation:

    Given that,

    Dividends per share of common stock = $1.80

    Market price per share of common stock = $30.00

    Dividend yield:

    = Dividends per share of common stock : Market price

    = $1.80 : $30.00

    = 6%

    Therefore, the dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments.
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