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FIN 120 Final Exam 2025 Questions and Answers What happens to the dividend yield if either the dividend changes or the price changes? - ....ANSWER☑️☑️...-Divided yield is a stock's annual dividend by its current price. dividend price=dividend. If dividend of prices changes then dividend yield changes. As stock prices rise, dividend yields go down. As stock prices fall, dividend yields rise. =Annualized dividends/ current price To better explain the concept, refer to the following dividend yield example. Suppose company ABC's stock is trading at $20 and pays annual dividends of $1 per share to its shareholders. Also suppose that company XYZ's stock is trading at $40 and also pays annual dividends of $1 per share. This means that company ABC's dividend yield is 5% (1 / 20 = 0.05), while XYZ's dividend yield is only 2.5% (1 / 40 = 0.025). Assuming all other factors are equivalent, then, an investor looking to use his or her portfolio to supplement his or her income would likely prefer ABC's stock over that of XYZ, as it has double the dividend yield. Is preferred stock considered debt or equity? - ....ANSWER☑️☑️...-equity …FOR STUDY PURPOSES ONLY…©️ 2025 ALL RIGHTS RESERVED… 1