Question 1

What is dividend yield?

Accepted Answer

Dividend yield is the annual dividend payment divided by the current stock price, expressed as a percentage. It shows how much income you earn relative to the stock price.

Question 2

What is a good dividend yield?

Accepted Answer

A yield of 2–5% is generally considered healthy. Above 7–8% may signal higher risk or an unsustainable payout. Always check the payout ratio too.

Question 3

What is the payout ratio?

Accepted Answer

The payout ratio is the proportion of earnings paid as dividends. A ratio under 60% is typically sustainable; above 80% may not be.

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