Answer:
The correct answer is 2.5%.
Explanation:
A company has 25,000 shares.
The par value of the common stock is $5.
The market value of the stock is $16 per share.
The dividend paid is $0.4/share.
The company's dividend yield is
= [tex]\frac{Dividend\ per\ share}{Market\ value\ per\ share}[/tex]
= [tex]\frac{0.4}{16}[/tex]
= 0.025
So, the company's dividend yield is 2.5%.
