Explanation:

One way in which stock ownership pays a return is through dividends, the portion of a corporation's earnings that is paid to stockholders. To compute a stock's dividend yield, divide the amount of the annual dividend by the current price per share. For example, if a stock is priced at $10 a share and the annual dividend is $0.50 a share, the dividend yield is $0.50/$10.00, or 5%. 
Many common stocks and preferred stocks pay dividends. Most companies make their dividend payments on a quarterly basis. The amount and timing of dividend payments are at the discretion of the corporation's board of directors. There is no law that states a company must pay a dividend on its common shares, even if the company is profitable. The board of directors can raise, reduce or even eliminate a company's dividend rate; however companies try to maintain a fairly even flow of dividends, increasing the dividend when the company enjoys a growth in net earnings. One way in which stock ownership pays a return is through dividends, the portion of a corporation's earnings that is paid to stockholders. To compute a stock's dividend yield, divide the amount of the annual dividend by the current price per share.