Dividend yield is the financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the market value per share.
The yield is presented as a percentage, not as an actual dollar amount. This makes it easier to see how much return the shareholder can expect to receive per dollar they have invested.
Formula to calculate dividend yield.
If the annual dividend per share of Company X is $ 30 and the company’s stock price per share is $ 25, calculate the dividend yield.
Thus, the company’s dividend yield is 72%.