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Unformatted text preview: more than the returns on the lowest dividend yield portfolio. During this period, the lowest returns were earned by the firms in the intermediate dividend yield classes. Between 1971 and 1990, the lowest dividend yield stocks earned a higher annual return than the highest dividend yield stocks. Between 1991 and 2001, the advantage shifts back to higher dividend yield stocks. Over the entire period, higher dividend yield stocks generate a slightly higher annual return than lower dividend yield stocks. 19 Figure 2.1: Returns on Dividend Yield Classes - 1952 - 2001 Highest dividend yield stocks 20.00% Lowest dividend yield stocks 18.00% Average Annual Return 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Highest 2 3 4 5 Dividend Yield Class 6 7 8 1991-2001 1971-90 1952-71 9 Lowest Data from Ken French at Dartmouth. The stocks were categorized into classes based upon the dividend yields at the beginning of each year and the annual returns in t he following year were calculated. This figure represent...
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This note was uploaded on 01/17/2012 for the course ECON 101 taught by Professor Econnorm during the Spring '11 term at Art Institutes Intl. Minnesota.

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