CFA Practice Question

There are 201 practice questions for this study session.

CFA Practice Question

Dividends yield

I. is a measure of the current return to an investor in a stock.
II. is used to evaluate cash flow adequacy.
III. evaluates profitability.
IV. is a measure of investor confidence in a company.
Correct Answer: I only

Dividends yield is a market strength ratio used to measure of the current return to an investor in a stock.

User Contributed Comments 5

User Comment
jmcarr02 I would rather say: "dividend yield is a *partial or incomplete* measure of the current return to an investor in a stock".
tim2 I'm not sure IV is that wrong. I recall a year or two back one of the highest yeilding stocks was GM which reflected investor worries that it was f*cked. Which proved justified.
rise10 agreed...
Nando1 tim2: To the point on IV, then this shows that the statement is not correct.
joywind i think when it says current return here it assumes that no capital gain is realized. Therefore, dividend yield is the only component of the current return.
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