5 Questions
Which of the following investments would potential shareholders compare the dividend paid on a company's shares with?
Bonds
How is the dividend yield calculated?
Dividend as a percentage of the current share price
What is the dividend yield of ABC plc?
5%
How can the dividend yield be calculated on a per-share basis?
Dividend divided by the number of shares
What is the dividend per share of ABC plc?
£0.05
Study Notes
Dividend Yield
- Potential shareholders compare the dividend paid on a company's shares with other investments, such as bonds and savings accounts, to evaluate their return on investment.
- The dividend yield is calculated by dividing the annual dividend payment by the current market price of the share.
- The dividend yield of ABC plc is calculated based on its annual dividend payment and current market price.
- The dividend yield can be calculated on a per-share basis by dividing the dividend per share by the current market price per share.
- The dividend per share of ABC plc is the total annual dividend payment divided by the total number of outstanding shares.
Test your knowledge on dividend yield and its importance for potential shareholders. This quiz will cover the calculation of dividend yield and how it compares to returns on other investments such as shares, bonds, and bank deposits.
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