NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
A company earns a net profit of ₹50 crore and pays a dividend of ₹20 crore. Its share price is ₹200 and it has 2 crore shares. What is the dividend yield?
The dividend yield is 5%. Total dividend of ₹20 crore over 2 crore shares gives ₹10 per share, and dividing by the ₹200 market price gives 5%.
- A5%Correct
- B10%
- C4%
- D2.5%
Explanation
Dividend per share = 20 crore / 2 crore = ₹10. Dividend yield = 10 / 200 = 5%. Using EPS (₹25) instead of DPS would give 12.5%, and 10% confuses payout ratio-type figures.
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