The use of the word reasonable brings in the element of subjectivity. With interest rates on FDs hovering above 7 per cent, buying a stock with a 7-8 per cent dividend yield may not appear the best decision. In such conditions, investing in stocks where the dividend yield is not even 5, would appear to be even worse. But if a dividend yield of between 4 to 5 percent is combined with a reasonable probability of capital gains, it would be worthwhile to have these stocks on your watch list.
