How Do You Do A Dividend Yield Calculation?
One way to determine if a stock would be a wise investment is to perform a dividend yield calculation. Essentially, the dividend yield is the ratio that indicates the return on an investment or the amount a company pays stockholders each year in relation to its share price. The dividend yield calculation is helpful to investors who wish to compare the value of stocks, especially those who are seeking income from dividends. Read the following steps to learn more about how to perform a dividend yield calculation. Step 1 Find the annual dividend per share. This figure represents the sum of money paid to shareholders of a corporation from earnings. Step 2 Find the price per share of your stock. Check the current price at various websites. Step 3 Use a calculator to determine the annual yield calculation by taking the annual dividend per share and dividing it by the stock’s price per share. For example, if the ACME Widget Company’s annual dividend is $1.75 and the stock trades at $27, then
