FAQ’s about Yield – West Palm Beach, Delray Beach and Boca Raton, Florida Bond, Preferred and Common Stock State and Federal Court Litigation and FINRA Arbitration Attorney:
Yield: In general, yield reflects the return on an investor’s capital investment. As it relates to bonds, current yield is calculated by dividing the coupon rate of interest by the purchase price. For example, a bond selling for $1,000 with a 10% coupon offers a 10% yield.
The yield relative to a bond can be viewed from other perspectives. One such alternative view is yield to maturity. This is the rate of return on a bond, taking into consideration the total of annual interest payments, the purchase price, the redemption value, and the amount of time remaining until maturity.
The yield on a stock (dividend yield) reflects the percentage rate of return paid on a common or preferred stock in dividends. For example, a stock that sells for $20 per share and pays an annual dividend of $2 per share has a yield of 10%.
Please keep in mind that this information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this article, you should contact a qualified professional.
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