Dividend Yield and Share Price
Share price
of company can be calculated from the dividend yield and Dividend information.
Formula for share price is Share price = Dividend per share/Dividend Yield.
Dividend yield would be upward adjusted because unquoted company carries more
risk.
Example of Dividend Yield and Share
Price
ABC and
Company has dividend yield of 20% and announced dividend for XYZ is $ 4.
Calculate the share price. Where XYZ is unquoted company and carry more risk
and dividend yield is to be adjusted by 5%.
Solution
Share price = Dividend per
share/Dividend Yield
= $ 4/.25
=$ 16
