Dividend yield is dividend to
price ratio. It is the percentage calculated by dividing dividend per share by
price per share. Dividend yield is used to calculate the earning on investment
(shares) considering only the returns in the form of total dividends declared by
the company during the year.
Dividend Yield = Interim + Final Dividend X 100
Market Price of the share
E.g.: For a company for FY10,
Interim dividend = Rs. 2 per share
Final dividend = Rs. 3 per share
Share price = Rs. 50
Dividend yield = 2 + 3
50
Dividend yield =10%
Dividend Yield = Interim + Final Dividend X 100
Market Price of the share
E.g.: For a company for FY10,
Interim dividend = Rs. 2 per share
Final dividend = Rs. 3 per share
Share price = Rs. 50
Dividend yield = 2 + 3
50
Dividend yield =10%
