Sharing Profits

All businesses reinvest their earnings, until such time that they can afford to disburse some of their earnings - Dividends! There are two ways to earn returns from a share: dividend income and capital appreciation. A company that pays a high dividend per share is a good bet, but you need to evaluate the price paid for this dividend. This concept is commonly known as dividend yield. It is calculated by dividing the annual dividend income per share by the prevailing share price. It estimates the current fixed- return potential of your investment assuming that future returns co

This article was originally published on July 04, 2007.