# current yield

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## Current yield

## Current Yield

The income from dividends (for stocks) or coupons (for bonds) divided by the market price of the security, expressed as a percentage. This is sometimes used in making the decision of whether or not to buy a security, but it does not accurately reflect its return, as the market price changes constantly. It is also called the current return or the running yield.

## current yield

The annual rate of return received from an investment, based on the income received during a year compared with the investment's current market price. For example, a bond selling at $800 and paying an annual interest of $80 provides a current yield of

^{$80}/_{$800}, or 10%. Also called*rate of return*,*running yield*.## Current yield.

Current yield is a measure of your rate of return on an investment, expressed as a percentage. With a bond, current yield is calculated by dividing the interest you collect by the current market price.

For example, if a bond paying 5% interest, or $50, is selling for $900, the current yield is 5.6%. If the market price is $1,200, the current yield is 4.2%. And if bond is selling exactly at par, or $1,000, the current yield is 5%, the same as the coupon rate.

If you own a stock, its current yield is the annual dividend divided by its market price.