Question

Which one of the following correctly describes the dividend yield?

1) The ratio of annual dividend per share to the market price per share
2) The ratio of annual dividend per share to the face value per share
3) The ratio of annual dividend per share to the book value per share
4) The ratio of annual dividend per share to the earnings per share

Answer 1

The dividend yield is the ratio of annual dividend per share to the market price per share.

Step-by-step explanation:

The correct description of dividend yield is option 1) The ratio of annual dividend per share to the market price per share. Dividend yield is a financial ratio that compares the annual dividend payment of a company to its market price per share. It is often expressed as a percentage and is used by investors to assess the income potential of a stock.