What are 'shareholder ratios' and how do you work them out?
Shareholder ratios are measures used to assess the level of return received by the shareholders of a company. There are two main meaures: dividend per share and divident yield.
Dividend per share = a ratio to show how much dividends is paid to shareholders per share. It is expressed in the formula: total dividends paid ÷ number of shares issued. The result is expressed in a price for example £0.15 dividend per share.
Divident yield = a ratio that compares the dividend per share with the current market price of the share. It is expressed in the formula: (dividend per share ÷ current share price) x 100. The result is expressed in a percentage which allows shareholders to compare their investment choice with other investment options such as investment funds.
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