Dividend yield

Dividend yield shows the income component of a share investment relative to its price. Specify whether the dividend is historical or forecast and whether the price is current or an investor's original cost. It excludes capital gains and losses and does not capture retained earnings or guarantee that dividends are sustainable. A high yield may reflect a falling share price and concerns about future distributions. In the constant-growth dividend model, next year's dividend yield plus growth gives the estimated cost of equity under the model's assumptions.