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Accounting




Yield


The rate of return on an investment (broadly, return on capital) that is obtained over a period of time (marking its holding period), often expressed as a percentage of the amount initially invested (i.e., the principal). An investment could be an amount invested in securities such as bonds or stocks. In which case, yield represents the interest a bondholder can earn from a bond (bond yield) or the dividends a stockholder can receive from a specific stock (stock yield).

Yield = annual income/ investment amount

For example, the dividend yield for a stock or similar instrument is a financial ratio reflecting the annual value of dividends received relative to the market value per share of a security. A bond yield is how much the bondholder as an investor will make from the bond. Yield accounts for both income and growth cash flows from an investment.

Dividend yield = dividend per share/ share price

Earnings yield refers to the earnings per share (EPS) corresponding to a financial period, divided by the current share price. It is the reciprocal of the P/E ratio.



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Accounting is the language of business, everywhere, worldwide. It is the means by which virtually every business communicates information about its operations, irrespective of size, scale, objectives, ...
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