Companies issue common stock to finance their activities, but investors do not know in advance how much income they will receive from such investments. In the long run, the profitability depends on the profits of the enterprise.
Instructions
Step 1
Find out the cost at which the investor purchased the share. If a company's securities are listed on the stock market, the current value of the share may differ from the par value at which the purchase was made. When calculating the yield, take into account the initial costs, then you will find the dividend yield. Let, for example, an investor bought one share for 500 rubles a year ago. and wants to calculate the level of dividend income for the past period.
Step 2
Look in the financial statement to see what dividend investors will receive based on the results of the year. The decision on this is taken arbitrarily, because when setting the amount of the dividend, organizations are guided by different motives. Therefore, dividend yield is not the best way to compare two companies, but this indicator is necessary for an investor to evaluate their investments. Let in the considered example the company pays a dividend of 10 rubles. per share.
Step 3
Make sure the data from the previous steps is in the same dimension. If this is not the case, bring them into line with each other. If in the second step there were a value of 10 kopecks, it was necessary to represent it in the form of 0.1 rubles.
Step 4
Divide the result of the second step by the number from the first, taking into account the corrections made in the third step: 10/500 = 0.02.
Step 5
Express your dividend income as a percentage. To do this, multiply the result of the fourth step by 100%. As a result, 0.02 * 100% = 2%. Consequently, the investor received a return of 2% per annum on his investment.
