Yield in finance is like a harvest, similar to the fruits your garden produces. It’s the reward you receive for letting your money grow over time. The seeds you plant are investments like stocks or bonds. As they grow, they generate something valuable, which is the yield. There are two main types of yield: Dividend yield is when a company shares its profits with you for owning its stock. When the plant produces fruits, you get a portion of those fruits. Dividend yield is calculated as a percentage of your investment and shows how much money you’re receiving back from the company’s profits. On the other hand, there is interest yield. If you lend your money to someone, they’ll often give you back more than you lent as a “thank you” for lending to them. It’s a percentage of the amount you lent, showing how much extra you’re earning. While yield is a way to measure the benefits of your investments, like plants, investments can also have risks. Just as bad weather can affect your garden’s growth, changes in the economy can impact investment performance. So, it’s essential to consider both the potential rewards and risks before planting your financial seeds. A company’s brand reputation or customer relationships can yield positive outcomes such as increased customer loyalty, higher sales and improved market positioning. The yield of intangible assets can include higher revenue, enhanced market share, improved customer satisfaction and operational efficiency, among many others.
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