Proffesor Damodaran of NYU stern says that the divident yield on sensex 30 stocks in 2007 was 3.05 while official website of Sensex (bseindia.com) shows it to be 1.60?
How can we have two dividend numbers for the same index? Where am I getting the thing wrong?

Question

Proffesor Damodaran of NYU stern says that the divident yield on sensex 30 stocks in 2007 was 3.05 while official website of Sensex (bseindia.com) shows it to be 1.60?
How can we have two dividend numbers for the same index? Where am I getting the thing wrong?

anonymous · Answer

I checked BSE and found that the dividend yield in 2007 was just 1.1%, while PE was 22.25 and PB was 5.32. The year 2007 and early 2008 saw sensex reaching all time highs above 20k and clearly overvalued. A price to book above 5 and PE of 22 shows its clearly overvalued. If dividend yield were 3% it would be a golden opportunity to invest assuming PE and PB are also lower. Go to this link and check out yourself. http://www.bseindia.com/indices/IndexArchiveData.aspx?expandable=3 Choose the yearly options (for period) and check for 2007.