Question Description
I’m studying for my Business class and don’t understand how to answer this. Can you help me study?
Describe what a common stock yield is and why it is important for an investor. Describe and explain the importance of a bond yield also. How is a common stock investor and a bond investor different? What different expectations do they have? If a common dividend is not paid, what recourse do the stockholders have? What recourse do bond holders have available if bond interest payments are not made?
Explanation & Answer
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Running head: COMMON STOCK YIELD
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Common Stock Yield
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COMMON STOCK YIELD
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Common stock yield
Stock yield is the dividend yield only. It means how much a company pays in the form of a
dividend by buying one stock of a company. Formula =Annual Dividend per share / Share price
Significance of stock yield: It is crucial when you are not getting capital appreciation
in the stock but getting dividends so you can calculate your per annum return on the stock. The
dividend is mostly in the form of cash, so you will come to know that how much money you
are getting in a year for buying a particular stock. Some investors are less risk-averse pe...
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