The dividend yield is calculated by dividing the dividend by?

Question

Quizplus · Accepted Answer

The dividend yield is calculated by dividing the dividend by the market price. This ratio helps investors estimate the return they will earn from holding onto a particular stock in the form of dividend payments. Option A, EPS, is used to calculate price-to-earnings (P/E) ratio, which is used to determine if a stock is overvalued or undervalued. Option B, Book Value, is used to calculate price-to-book ratio, which is used to determine if a stock is over or undervalued based on its current assets and liabilities. Lastly, option C, Income, is too broad and does not provide a specific financial metric that is used to calculate the dividend yield.

The Dividend Yield Is Calculated by Dividing the Dividend By