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A company paid $0.55 in cash dividends per share. Its earnings per share is $2.55, and its market price per share is $26.25. Its dividend yield equals:

Respuesta :

The company's dividend yield equals 2%.

Exactly what does the dividend yield reveal?

The yearly percentage of a company's share price that is paid out in dividends, reflected by the financial ratio known as the dividend yield. For instance, a corporation with a share price of $20 and a $1 annual dividend would have a 5% dividend yield. If a firm's dividend yield has been rising steadily, it may be because the company is raising its dividend, its stock price is falling, or both. Investors could see this as either a good or bad thing, depending on the situation.

How significant is dividend yield?

Retirement-age investors, for example, significantly rely on dividend income. It is crucial for these investors to choose dividend-paying companies with established track records and evident financial soundness because the dividend yield of their portfolio may have a significant impact on their personal finances.

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