Dividend Yield Ratio

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on August 26, 2021

Dividend yield ratio shows the percentage return to the investor on the market value of the preference or ordinary share he owns. Like dividend coverage ratio, this ratio is also calculated separately for each class of shares.

Formula

For preference shares:
dividend-yield-ratio-formula-preference
and for ordinary shares:
dividend-yield-ratio-formula-ordinary
Dividend is very often a major part of all that a shareholder gets from the company for his investment in the shares. Hence, dividend yield ratio frequently represents the significant portion of the return going to the shareholder in the form of dividends.

Dividend Yield Ratio

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

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