The dividend yield is calculated by dividing the annual dividends of the company by the current price of the share. It is represented by a percentage.
- The dividend yield is calculated by dividing the annual dividends of the company by the current price of the share.
- It is represented by a percentage.
Dividend yield is a measure of the productivity of your investment, and generally indicates how much money you will get in relation to how much money you have invested in an open position.
Does this mean that you should invest in stocks of companies that provide the highest dividend yield? Not necessarily, because the benefits obtained by investing in stocks are not based only on dividends, but also on the increase in the value of the company's price in the market. What's more, a company that pays the highest dividends does not reinvest its earnings in growth and expansion.
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