A retired investor who buys common shares to earn dividend income rather than for price appreciation is
Question:
A retired investor who buys common shares to earn dividend income rather than for price appreciation is about to buy the shares of Company A because its dividend yield is much higher than the yield offered on Company B shares. Should the investor make this decision by looking solely at the dividend yield ratio? Explain why or why not.
Step by Step Answer:
Making a decision to buy shares based on a single ratio the dividend yield ratio is not recommend...View the full answer
Financial Accounting Tools For Business Decision Making
ISBN: 9781119594574
8th Canadian Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine, Christopher D. Burnley
Related Video
The dividend yield or dividend–price ratio of a share is the dividend per share, divided by the price per share. It is also a company\\\'s total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage.
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