Earnings Yield Law and Legal Definition

Earnings yield is the earnings per share of a security divided by its market price. It is the ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. It is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. The higher the ratio, the better the investments yield. Earnings yield is also termed as earnings-price ratio.