Earnings Yield: Definition, Formula & Calculation


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If there was a 3rd company your grandmother could invest in with a market price per share of $20 and an earnings yield of 5%, what would have to be the company's past 12-months earnings per share?

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1. What would Grandma's return on investment at the end of next year (in % terms) be if she decided to invest $5,000 in Big Cheese and $5,000 in Big Box?

2. What will Grandma's return on investment be at the end of next year (in $ terms) if she invested all $10,000 in Big Cheese?

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About This Quiz & Worksheet

Use the worksheet and quiz any time to see just how much you know about earnings yield. You need to know what this term means and understand its formula for the quiz.

Quiz & Worksheet Goals

These tools let you see what you know about the following topics:

  • Figuring out price-to-earnings ratio
  • Calculating earnings yield given a market price and earnings per share
  • Finding a past 12-months earnings per share figure

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the lesson on earnings yield
  • Information recall - access the knowledge you have gained about calculating return on investment
  • Interpreting information - verify that you can read information about how to find earnings yield and P/E ratio and interpret it correctly

Additional Learning

Earnings Yield: Definition, Formula & Calculation is a lesson you can access to study more about these topics:

  • What earnings yield is
  • Similarities between earnings yield and price-to-earnings ratio
  • Examples of calculating earnings yield