- yield gap
- The difference between the average annual dividend yield on equity and the average annual yield on long-dated gilt-edged security Before the 1960s yields obtained from UK equities usually exceeded the yields provided by long-dated UK gilts, reflecting the greater degree of risk involved in an investment in equities. In the 1960s, however, rising equity prices led to falling dividend yields causing a reverse yield gap. This was widely regarded as acceptable, as equities were seen to provide a better hedge against inflation than fixed-interest securities; thus their greater risk element is compensated by the possibility of higher capital gains.
Big dictionary of business and management. 2014.
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