Dividend yield on ordinary shares is calculated as:
A)dividends per share divided by market price per share.
B)annual dividend divided by issued capital.
C)annual dividend divided by earnings.
D)None of the above

Question

Quizplus · Accepted Answer

Dividend yield on ordinary shares is calculated by dividing the annual dividends per share by the market price per share. It is expressed as a percentage, which indicates the return on investment. Option B is incorrect because the issued capital is not used in the calculation of dividend yield. Option C is incorrect because earnings are not used in the calculation of dividend yield. Option D is incorrect because there is a correct choice, which is option A.

Dividend Yield on Ordinary Shares Is Calculated As