Question of the Week
The current yield on the stock has gone down
b) It is a utility stock
c) The current yield on the stock has gone up
d) The stock is anti-cyclical
correct answer is c.
Current yield compares the current price of acquiring the stock to the income from the stock, the dividends. In this case, the income has stayed the same while the price to acquire the stock has dropped. This means that the actual return on a dollar invested has gone up.