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Anticipated annual dividend divided by the market price of the stock is referred as:
  • a)
    Dividend pay-out
  • b)
    Dividend yield
  • c)
    Return on equity
  • d)
    Regular dividend
Correct answer is option 'B'. Can you explain this answer?
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Anticipated annual dividend divided by the market price of the stock i...
The dividend yield is the ratio of a company's annual dividend compared to its share price. The dividend yield is represented as a percentage and is calculated as follows:
Dividend Yield = 
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Anticipated annual dividend divided by the market price of the stock i...


Dividend Yield:

The dividend yield is calculated by dividing the anticipated annual dividend by the market price of the stock. It is expressed as a percentage and represents the return on investment that shareholders receive in the form of dividends.

Importance of Dividend Yield:

- Dividend yield is a key metric for investors as it helps them assess the income potential of a stock.
- It allows investors to compare the dividend-paying ability of different stocks.
- A high dividend yield may indicate that a stock is undervalued, while a low dividend yield may suggest that a stock is overvalued.

Calculation:

The formula to calculate dividend yield is as follows:
Dividend Yield = (Anticipated Annual Dividend / Market Price of Stock) * 100

For example, if a stock has an anticipated annual dividend of $2 per share and a market price of $40 per share, the dividend yield would be:
(2 / 40) * 100 = 5%

Interpretation:

A dividend yield of 5% means that for every $100 invested in the stock, the investor can expect to receive $5 in annual dividends. This can be compared to other investment opportunities or to historical dividend yields of the same stock to make informed investment decisions.

In conclusion, dividend yield is a valuable metric for investors to assess the income potential of a stock and make informed investment decisions based on the return on investment in the form of dividends.
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Direction: Read the following passage carefully and answer the questions.The Draft National Education Policy, 2019 (DNEP) implements the India-centric education system, which contributes to the continuous transformation of our nation into a just and vibrant knowledge society, by providing high-quality education to all. The NITI Aayog has focused policy focus specifically on education and outcomes of education from programs. It has promoted competitive federalism among states to improve their educational indicators that are measurable by a battery of tests on students. But any serious work on No One Left Behind (NOLB) can ask for a new and reformist approach. DNEP has provided some hope, but it calls for further examination of rhetoric and reality.DNEP must be read in the context of the current economic and educational climate in order to estimate the path and speed needed to make its vision a reality. On the one hand, we are in another new era of industrial revolution or skilled age. On the other hand, at present, around one million youth enter the workforce in India each month, but most of them are just raw hands without professional technical knowledge or practical business skills. The weak relationship between education and employment poses a potential risk of turning Indias demographic dividend into a demographic disaster.In the education sector, the elusive chaos of the quantity-quality-equity triangle remains unresolved. Although the merits of education are well recognized as an invaluable public, public investment for this has been minimal. It is relevant to explore how DNEP has addressed some key areas for policy interventions in school education, namely access, which can be measured by the education system, the size and flow of students crossing over to equity, which can be seen development-deprived populations, and lack or persistence of quality, which can be understood by teaching-learning processes and developmental outcomes for children that are more easily implied by attainable scores.Q. What calls for further examination of rhetoric and reality?

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Anticipated annual dividend divided by the market price of the stock is referred as:a)Dividend pay-outb)Dividend yieldc)Return on equityd)Regular dividendCorrect answer is option 'B'. Can you explain this answer?
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