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.**

**Example:**

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%.