Calculating Dividend Yield
The formula for calculating dividend yield is gallopingvideo.com straightforward:
Dividend Yield=Annual Dividend per ShareCurrent Stock Price×100\text{Dividend Yield} = \frac{\text{Annual Dividend per Share}}{\text{Current Stock Price}} \times 100
Example Calculation
Suppose a company pays an annual dividend of $4 per share, and the current stock price is $100. The dividend yield would be:
Dividend Yield=4100×100=4%\text{Dividend Yield} = \frac{4}{100} \times 100 = 4\%
This 4% yield indicates that for every $100 invested, the investor receives $4 in dividends annually.