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Definition of

earnings yield


earnings as percentage of stock price money earned by a company during a year, expressed as a percentage of the price of one of its shares

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    Chief financial officers are charged with the task of maximizing shareholder wealth. They do this by pursuing two key goals: Maximizing the stream of future cash flows, and minimizing the company’s cost of capital. Cognizant of the separation theorem, we tend to separate one goal from the other. However, both are of strategic importance—a healthy stream of cash flows can actually destroy value (and hence reduce shareholder wealth) if the company...

Definitions of ’earnings yield’ and meaning of ’earnings yield’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’earnings yield’ and other financial terms with our online QFINANCE Financial Dictionary.

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