Explaination of Dividend Yield with current share price and Face value

Hi,

People live the high dividends yielding companies, but first one must understand the dividend yield percentage to compare any two or many companies.

Dividend yield is always meausred in percentage. Let's take the example of IOC - Indian Oil Corporation Limited- the highest dividend yield company.

Let's say in the year 2018 IOC paid a total dividend of 8.75 rupees (2 rupees in August and  6.75 in December .)
The current share price is 140 rupees, therefore the yield  is:
8.75*100/140 = 6.25 % with the current ahare price.

But companies don't declare the dividend with the current share peice, but with the Face Value of the share. So if the Face value of the IOC share is 10 rupees, then the dividend yield is 8.75*100/10 = 87.5%

Now for a new investor like me, the dividend yield of Face Value is of no importance, because my buying price is the current value of the share. This is why that an individual must calculate the dividend yield separately with the current share peice.

Thanks!

Thanks!