Hi, my name is Grant Hobson. I work as a finance analyst and today, I'm going to talk you through some business math calculations and ratios. How to calculate dividend yield. Dividend yield is a useful way to asses whether a stock is a good investment. Two ways that would generate income from an investment in a company would be an increase in the share price which would then sell between the acquisition and the sale of the stock would then be any dividends that we receive. The dividend yield is basically just the ratio of the return to the sharer orders from their investment. I'll calculate now an example just to demonstrate how it works and I will compare one stock to another. So on occasion, the high dividend yield could be considered to be evidence that stocks from the priced. Alternatively, low dividends are evidence that stocks are overpriced and future dividends might be higher. If you look here, an example just to calculate dividend yield, you can see the formula. So it's basically your current dividend yield equals your most recent dividend divided by your share price. So we're going to take three companies in this example and all we need is the stop price and the dividend. So the stock price in company A is 8 pounds, the stock price in company B is 3.50, and the stock price of company C is 13.75. So if we see that the dividend sharing company was 9.28, so it would give us a dividend yield of 3.5%. So you might want to compare that to company B now whose previous dividend share was 9.15. That's the dividend of 4.3%. The dividend share for the final company C was .8 pounds. So the dividend yield of 5.8%. So, say the company C, the highest stock price looks like a more established company is a shoe in higher dividends to it, add all this and that would be the one that's more appealing than the others if we're looking to generate a return dividends as opposed to share price increase. .

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