Question: What is Yield method for valuation of shares?
Answer: Yield value of a share is also known as Capitalized value of Earning Capacity. Normal rate of return in the industry and actual or expected rate of return of the firm are taken into consideration to find out yield value of a share. Instead of rate of return (ROI),rate of dividend may also be taken.Yield refers to the earning or productivity of a firm in relation to its investments. Such yield may be Earning Yield or Dividend Yield. Earning Yield = Profits available to equity shareholders ÷ Number of equity shares Dividend Yield = Total dividend for equity shareholders ÷ Total paid up equity share capital x 100
Question:
What is Yield method for valuation of shares? Answer:
Yield value of a share is also known as Capitalized value of Earning Capacity. Normal rate of return in the industry and actual or expected rate of return of the firm are taken into consideration to find out yield value of a share. Instead of rate of return (ROI),rate of dividend may also be taken.Yield refers to the earning or productivity of a firm in relation to its investments. Such yield may be Earning Yield or Dividend Yield. Earning Yield = Profits available to equity shareholders ÷ Number of equity shares Dividend Yield = Total dividend for equity shareholders ÷ Total paid up equity share capital x 100 Source: CoolInterview.com
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