Current Yield Calculator (Bonds & Equities)
Calculate the immediate cash income generated per dollar of market investment. This calculator computes the current (running) yield across fixed-income bonds, preferred equities, and dividend-yielding assets without distortion from maturity par adjustments.
Total annual coupon interest or dividend cash flow received
Current spot market purchase quote for the bond or security
Total number of bonds or shares in position
Annual income divided by current market price
How to Use This Calculator
- Enter the annual coupon interest or cash dividend distributed per bond/share.
- Enter the current spot market trading price.
- Input the total units held to model total dollar cash flow.
- Examine current yield to compare immediate cash productivity across alternative investments.
Formula & Calculation Methodology
Current yield relates the immediate cash flow from coupons or dividends directly to the current spot cost basis, ignoring future capital gains or losses realized at terminal maturity.
Worked Example
10 bonds paying $60 annual coupon each purchased at $960 discount price
Frequently Asked Questions
How does Current Yield differ from Yield to Maturity (YTM)?↓
Current Yield reflects only immediate income return (Coupon / Price). YTM is more comprehensive because it also factors in the capital gain realized when a discount bond redeems at par value ($1,000) at maturity.
When is a bond’s Current Yield equal to its coupon rate?↓
A bond’s Current Yield equals its nominal coupon rate only when the bond is trading at exactly 100% of par value ($1,000). If trading at a discount, Current Yield exceeds the coupon rate.
Can Current Yield be used for preferred stock and real estate REITs?↓
Yes. Current Yield applies universally to any asset with predictable periodic cash distributions, including preferred equities, REITs, royalty trusts, and master limited partnerships (MLPs).
Does Current Yield account for bond reinvestment risk?↓
No. Current Yield assumes you receive and spend the coupon cash flows. It does not model whether intermediate distributions can be reinvested at identical rates.
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Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.