How is the dividend yield expressed?

Dividend yield represents the annual dividend payment made by a company relative to its share price and is expressed as a percentage. This measure provides investors with an indication of the return they can expect from dividends relative to their investment in the stock.

To calculate the dividend yield, one takes the annual dividends paid per share and divides that figure by the current share price, then multiplies by 100 to convert it into a percentage. This allows investors to easily compare the yield across different stocks and assess the attractiveness of a particular investment based on its dividend compared to its price.

In contrast, expressing the dividend yield as a dollar amount or as a fraction of profit does not convey the ratio of the dividend relative to the investment's market value. Therefore, the percentage format is the most informative and widely used for representing dividend yield in the context of investment analysis.