Step 1: Understand the maximum shear stress failure theory.
According to the maximum shear stress failure theory (also known as Tresca's theory), yielding occurs when the maximum shear stress reaches a critical value.
The maximum shear stress is calculated as:
\[
\tau_{\text{max}} = \frac{\sigma_1 - \sigma_3}{2}
\]
Where \( \sigma_1 \) and \( \sigma_3 \) are the maximum and minimum principal stresses, respectively.
Step 2: Apply the theory to yield stress.
According to Tresca's theory, yielding will occur when:
\[
\tau_{\text{max}} = \frac{\sigma_{\text{yield}}}{\sqrt{2}}
\]
Therefore, the correct answer is:
Maximum shear stress = \( \sqrt{2} \times \text{yield stress} \).
Final Answer:
\[
\boxed{\sqrt{2} \times \text{yield stress}}
\]