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Dividend yield |
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Dividend yieldThe annual dividend income per share received from a company divided by its current share price. Put simply - how much income are you getting out of the company for the capital you've got locked up in it?Dividend yields are calculated on the net dividend.Example: a company declares a net dividend of 2.1p per share. Its share price is 150p. To get the dividend yield, divide the net dividend by the current share price:2.10 /150 = 1.4%The dividend yield is 1.4%. Note that the higher the share price, the lower the dividend yield. Using the above example, if the shares rose to 200p, the yield would fall to 1.05%2.10/200 = 1.05%The problem for investors is that if a company has a low dividend yield compared to other companies in its sector, it can mean two things. Either it means the company's share price is high because the market reckons it's got great growth prospects and doesn't care too much about income, or it means that the company's a busted flush and can't afford to pay decent dividends.Similar MatchesDividend clawbackDividend clawbackAn arrangement under which sponsors of a project agree to contribute as equity any prior dividends received from the project to the extent necessary to cover any cash deficiencies. Accumulated dividendAccumulated dividendA dividend that has reached its due date, but is not paid out. See: Cumulative preferred stock. Year end dividendYear end dividendAn additional dividend paid at the end of the trading year and based on company profits. Perfect market view (of dividend policy)Perfect market view (of dividend policy)Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy. Unpaid dividendUnpaid dividendA dividend which has been declared by a corporation but has not yet been paid. Further SuggestionsSpecial dividendSelling dividends Cumulative dividend feature Stock dividend Dividend capture Year end dividend passed dividend Outstanding Dividends scrip dividend interim dividend Dividends received deduction Interim dividend Ex stock dividends Dow dividend theory stock dividend Discounted dividend model (DDM) Unpaid dividend accumulated dividend final dividend dividend growth Omitted dividend With dividend Tax differential view (of dividend policy) Ex dividend Residual dividend approach |
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