Q&ACategory: Dividend StocksComputation of historical dividend yield (step 8)
May Ho asked 4 months ago
May Ho replied 4 months ago

When extracting historical share price to compute the historical yield, do we use the price transacted at the close of the same month in which the dividend was paid. Eg., the final dividend was paid in Aug 2000, we use the historical share price as at 31 Aug 2000 to compute the yield? Or say we found that the dividend paid for 2000 is 0.xx cents, can we use the share price as at 31 Dec 2000 to compute the historical yield, without matching the month?

2 Answers
Rusmin Ang Staff answered 4 months ago
Hi May, You can download share price from Yahoo!Finance and refer to their 'Closed Price' for the calculation of historical yield. Then you have to try to figure out which point is their high yield and this can be usually done visually where you spot the price at the lowest. The low point often happens during 2008/09 (GFC), 2011/12 (Euro Debt Crisis), 2015 (China crash), 2020 (Covid), etc. So we don't really use share price as end of the month but we look at the share price when they are at its low or high at any given bull or bear market.
May Ho answered 4 months ago
Thanks, Rusmin. I noticed from Yahoo Finance there is a historical chart showing prices and dividends. Can we use this chart to lift the prices at the high / low points and the dividends indicated in the chart for the same year to calculate the historical yield? Thank you.
Rusmin Ang Staff replied 4 months ago

Just use the Closed Price as it won’t adjust for the dividend which should be the one we used to calculate historical yield. Adjusted close price will minus off the dividend paid over time and it makes the share price highly inaccurate over time, especially if we stretch it across few years.

May Ho replied 4 months ago

Thank you.