NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
A company with 10 crore shares outstanding has a net profit of ₹150 crore and pays out ₹60 crore as dividend. If the share trades at ₹300, what is the dividend yield?
The dividend yield is 2%. Total dividend of ₹60 crore over 10 crore shares gives ₹6 per share, and dividing by the ₹300 market price gives 2%. Net profit is not needed for the yield itself, only for the payout ratio.
- A2.0%Correct
- B4.0%
- C5.0%
- D10.0%
Explanation
Dividend per share = 60 crore / 10 crore = ₹6. Dividend yield = 6 / 300 = 2%. The 4% figure uses a payout ratio (60/150 = 40%) mistakenly scaled, and 5% or 10% do not follow from the data.
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