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Ratios Made Simple: A beginner's guide to the key financial ratios by Robert Leach

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2. Investment Ratios

2.1: Dividend Yield

Definition:

Dividend yield = dividend ÷ share price

This figure is usually expressed as a percentage, which means multiplying the above by 100. The dividend yield is often simply called yield.

Dividend is the total of dividends paid for the year, grossed up to allow for the rate of tax deducted at source. The dividend is often paid twice a year. There is an interim dividend paid during the trading year, followed by a final dividend paid about six months later. Some companies pay dividends four times a year. There is no law about how many times dividends should be paid.

The figure for dividends is those for the last period of 12 months. Where dividends are paid twice a year, the dividend side ...

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