dividendyield,whichisdefinedtobethedividendspershare
as a percent of the market price. Figure 3.3 summarizes
dividend yields for dividend-paying stocks in the United
States in January 2005.
FIGURE 3.3 DividendYields:U.S. Companies in January
2005
The median dividend yield for dividend-paying stocks is
slightlylowerthan 2 percent,andtheaveragedividendyield
is about 2.4 percent. The reason we emphasize that these
valuesareonlyacrossdividend-payingstocksisbecausethere
aremorepubliclytradedstocksintheUnitedStatesthatdo
not pay dividends than do. Many of these
non-dividend-paying companies are smaller, high-growth
companies that cannot afford to pay dividends, but some
could pay dividends but choose not to.