INCOME is the interest or dividends on your investment. On payment by the company the dividend is expressed as a percentage of the par value of the share. For example, 10% on £100 ordinary shares of £1 each represents a gross dividend of £10, from which tax will be deducted before payment.
This dividend percentage (10%) does not in any way indicate the true yield on your original outlay, since the market price which you paid for the shares would in all probability be higher than par value. If the price paid was £40, your yield will be 5% (in the above example you will have laid out £200 and the dividend is still £10, i.e., 5% of the outlay).
There are certain types of ordinary shares which give a good yield but low capital appreciation (partly owing to the distribution to shareholders of a high proportion of the annual profits, and partly because of the risk inherent in the nature of the company's business).
About Little Octopus Publishing On the other hand there are companies the Blue Chips* being foremost amongst them, which have a low yield but sound and steady capital appreciation, often due to the high proportion of profits retained for expansion.
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