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Unformatted text preview: l service firms (banks, investment companies and insurance) representing about 20% each. Another striking aspect of this table is the magnitude of the dividend yields. Many of these stocks have dividend yields in excess of 10%. Since the treasury bond rate was about 4% in October 2002 and investment grade corporate bonds were yielding in the 5-6% range, you can see the allure of these stocks to investors in search of high cash yields on their investments. It is worth noting, however, that the dividends represent dividends paid over the last financial year whereas the stock price is the current price. The price will therefore reflect more updated information about the firm. If bad news has come out about the firm recently, the price will have dropped and the resulting dividend yield will be high. This is especially so for the stocks with dividend yields of 20% or higher. Investors should exercise due diligence by examining more recent news releases before they plunge into these stocks. 29 T...
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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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