NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
A stock has a dividend of Rs 12 per share and a current market price of Rs 480. Its face value is Rs 10. What is the dividend yield?
The dividend yield is 2.5%. It is calculated as dividend per share of Rs 12 divided by the current market price of Rs 480. Using face value of Rs 10 as the base would give the dividend rate of 120%, not the yield.
- A120%
- B12%
- C2.5%Correct
- D25%
Explanation
Dividend yield = dividend per share / market price = 12 / 480 = 2.5%. The 120% figure uses face value as the base (12/10), which is the dividend rate, not the yield.
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