How is dividend yield calculated?

Dividend yield is a financial ratio that indicates how much a company pays out in dividends each year relative to its stock price. It is calculated by taking the annual dividends paid per share and dividing it by the current stock price per share. This ratio is useful for investors as it provides insight into the income generated from an investment in the stock, expressed as a percentage of the investment's current market value.

Focusing on the other options, the first choice incorrectly relates total revenue to stock price, which is not relevant in determining dividend yield. The second option mistakenly attempts to connect dividends with total assets, a metric that is unrelated to dividend yield. Lastly, the fourth choice addresses profits in relation to shares, which describes earnings per share rather than focusing on dividends specifically. Thus, the correct option highlights the essential relationship between dividends and stock price necessary for calculating dividend yield.