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The dividend yield and the capital gains yield are two components. The yield on capital gains is higher for most businesses.
The two-stage growth model permits two stages of growth: an early phase in which the growth rate is not stable and a following steady state in which the growth rate is stable and is anticipated to stay that way for a long time.
By dividing the current dividend (Di) by the previous dividend (Di-1) and taking one out of the result, the periodic dividend increase can be calculated and expressed as a percentage.
The dividend yield is calculated using the formula: Dividend Yield = Cash Dividend per Share/Market Price per Share * 100. Let's say a corporation with a share price of 100 rupees announces a dividend of 10 rupees per share. In that scenario, the stock's dividend yield will be 10% (10/100*100).
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