Ch.10 · Risk Measures and Ratios · medium
What is 'dividend yield' and how is it relevant for equity mutual funds?
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EXPLANATION
Dividend yield is the annual dividend per share divided by the current stock price, expressed as a percentage. For equity mutual funds, dividend yield indicates the income component of portfolio returns. Dividend yield funds specifically target stocks with consistently high dividend yields — typically mature, profitable companies. High dividend yield may also signal undervaluation.
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