ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If a company issues a 5% stock dividend, it would increase the number of shares held by shareholders by 5%, or one share for every 20 shares owned. If there are one million shares in a company outstanding, this would translate into an additional 50, 000 shares.

Detailed explanation-2: -The dividend yield, expressed as a percentage, is calculated by dividing the annual dividend per share (DPS) by the current market share price.

Detailed explanation-3: -Dividend rates are expressed as an actual dollar amount and not a percentage, which is the amount per share that an investor receives when the dividend is paid. The rate may be either fixed or adjustable, depending on the company.

Detailed explanation-4: -The dividend yield, expressed as a percentage, is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price. The reciprocal of the dividend yield is the total dividends paid/net income which is the dividend payout ratio.