Question 1

How is dividend yield calculated?

Accepted Answer

Dividend yield = (annual dividend per share ÷ current market price) × 100. It shows the cash return from dividends alone, relative to today's price — not total return, which also includes price appreciation.

Question 2

What is yield on cost?

Accepted Answer

Yield on cost = (annual dividend per share ÷ your original purchase price) × 100. It shows your dividend return relative to what you actually paid, which can look very different from current yield if the stock has moved a lot since you bought it.