Question

In: Finance

"Current yield" is to ___________ as "dividend yield" is to ___________.

  1. "Current yield" is to ___________ as "dividend yield" is to ___________.
    1.      Bonds; perpetuities
    2.     Annuity present value; required return
    3.      Bonds; stocks
    4.     Stocks; bonds
    5.      Required return; total return

Solutions

Expert Solution

- Current Yield is calculating on Bonds to determine Interest earned on Current price of Bond.

Current Yield = Annual Coupon payment/Current price

- Dividend Yield is calculating on Equity to determine Dividend earned on Current price of Equity.

Dividend Yield = Dividend/Current price

Thus, "Current yield" is to Bonds as "dividend yield" is to Stocks.

Option C

 

jeff jeffy answered 2 years ago
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