Dividend yield refers to that return which a shareholder gets in the form of dividend during the year. Just as one gets interest on fixed deposit, in the same way an investor gets dividend for holding shares of the company if company makes profit. Given below is the dividend yield formula –
Annual dividend per share/Current Stock Price
So for example of a company has paid dividend of $1 and current stock price is $10 than dividend yield of the company will be 10 percent for the year.