The dividend yield is the percentage payout for each share of stock. Not all companies pay dividends, but the ones that do pay dividends are considered companies who are in the practice of returning income to shareholders. Dividends to incur double taxation, because companies must pay taxes on the income before they distribute dividends to shareholders, and then shareholders must also pay taxes on those dividends, but the dividend yield can work to offset declines in stock price during adverse times and as a means of generating income but for investors looking to supplement other income sources.
Here is how the Dividend Yield is calculated:
The dividend yield is calculated by taking the dividend per share and dividing it by the price per share. For example, if the dividend was $1.00 per share and the price of each share was $10.00 then the payout, or the dividend yield, would be 10%.
