Earnings and Dividend Yield

Is closely related to the EPS and DPS. While the EPS and DPS are based on the book value per share, the yield is expressed in terms of the market value per share. The earnings yield may he defined as the ratio of earnings per share to the market value per ordinary share. Similarly, the dividend yield is computed by dividing the cash dividends per share by the market value per share. That is,

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The earnings yield is also called the earning-price ratio.

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