Dividends are one way stocks return money to shareholders: a company can distribute part of its profits as regular cash payments. For many investors dividends provide steady income and can be reinvested to harness compound growth. Dividend yield is a simple ratio that compares annual dividends per share to the stock's current price -- it helps you quickly compare income from different stocks. But beware: a high yield can sometimes signal risk (e.g., a falling share price), and dividend policy differs widely across companies and sectors. For beginners, calculating yield is an essential, straightforward skill: divide the annual dividend by price and express it as a percentage. This question gives a compact example so you can practice the arithmetic and understand what the yield number actually means in plain terms.