display | more...

Dividend yield gives an indication of the rate of
return from dividends that an investment in a company
will return. It is calculated by
dividing the dividend per share by the market price
of the share. For example, suppose that good old company
XYZ pays out a dividend of 8 cents per share, and the
shares are selling for 210 cents each:

	Div Yield = Dividend per share / Price per share
	          = 8 / 210
	          = 0.038
	          = 3.8%

Dividend yield cannot
really be compared with the return from other investments
such as term deposits, because a company will also give
a capital return when the share price changes.

Log in or register to write something here or to contact authors.