Dividend yield

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The dividend yield of a share is the ratio of annualised cash dividends to the share's current market price. It is usually expressed as a percentage and is commonly calculated by dividing the annual dividend per share by the current share price. Closely related measures compare dividends to price and are often referred to as the dividend–price ratio. At the company level, the same idea can be expressed as total annual dividends divided by the company’s market capitalisation, assuming the number of shares remains unchanged. Dividend yield measures dividend income only; it does not include changes in the share price and therefore differs from total return. Reported yields depend on convention: some use a trailing yield, or dividends paid over the previous 12 months, while others use a forward yield, or an indicated dividend based on recent declarations, which may exclude special dividends. Because both dividends and prices can change, a high dividend yield can reflect a higher payout, a lower share price, or expectations that dividends will be reduced.