Easy accounting question?

The following information is available for Derby Co.:

2006
Dividends per share of common stock
$ 0.80
Market price per share of common stock
20.00

1. The dividend yield is 4%, which is of special interest to investors seeking current returns on their investments.
2. The dividend yield is 4%, which is of interest to investors seeking an increase in market price of their stocks.
3. The dividend yield is 4 times the market price, which is important in solvency analysis.
4. The dividend yield is 25%, which is of interest to bondholders.

I am not sure between 1 and 2

The answer is #1. Because the company pays a 4% dividend, its stock will appeal to investors seeking current income.

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