How Dividends Affect Stock Prices With Examples
The DPS for company HIJ is 50 cents ($2,500,000 ÷ 5,000,000) per share. A company can decrease, increase, or eliminate all dividend payments at any time. Additionally, in this low-interest-rate environment, the dividend yield offered by dividend-paying companies is substantially higher than rates available to investors in most fixed-income investments such as government bonds. A…