About Stock Yield Calculator (Formula)
A “Stock Yield Calculator” is a tool used to estimate the yield or return on an investment in a stock or dividend-paying security. The yield represents the income generated by an investment relative to its price. This calculator is valuable for investors to assess the potential returns from owning stocks and make informed investment decisions. The formula for calculating stock yield provides insights into the relationship between dividends and stock price.
The formula for calculating Stock Yield is:
Stock Yield = (Annual Dividend / Stock Price) * 100
Where:
- Stock Yield is the percentage return on the investment from dividends.
- Annual Dividend is the total annual dividend payment received from the stock.
- Stock Price is the current price of the stock.
This formula calculates the percentage yield based on the annual dividend and the current stock price.
For example, if a stock has an annual dividend of $2 per share and its current price is $50 per share, the stock yield would be:
Stock Yield = ($2 / $50) * 100 = 4%
This means that the stock yield is 4%, indicating that the investor can expect a return of 4% of the investment through dividends.
The Stock Yield Calculator is used by investors to evaluate the income potential of dividend-paying stocks and make decisions about portfolio allocation.