Response to the following problem:
The recent market price per share and dividend per share are provided for five large financial services and insurance companies traded on the New York Stock Exchange in the following table:
Company Market Price per Share Dividend per Share
American International Group (AIG) $67.11 $0.50
Prudential Financial Inc. 53.99 0.63
Lincoln National 45.76 1.46
Hartford Financial Services Group 66.61 1.16
ING Groep, NV 28.81 0.99
a. Determine the dividend yield for the five companies. Round percentages to two decimal places.
b. Why are the dividend yields different, even though these companies are from the same industry?
c. Should you avoid investing in a company with a low dividend yield?