Explain the both dividend yield and earnings yield, Finance Basics

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Explain the both Dividend Yield and Earnings Yield

Dividend Yield: Dividend yield is the ratio of per share expected dividends, to current market price of share.

Earnings Yield: Earnings yield is the ratio of expected earnings per share of the firm to current market price of the share. Dividend yield and earnings yield don't differ if firm distributes all net earnings in the form of dividends i.e. if it practices 100 per cent dividend pay-out ratio.

 


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