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HOSTING A TOTAL OF 318 FORMULAS WITH CALCULATORS

Current Yield

Current yield is a bond's annual return based on its annual coupon payments and current price (as opposed to its original price or face). The formula for current yield is a bond's annual coupons divided by its current price.

The current yield formula is used to determine the yield on a bond based on its current price. The current yield formula can be used along with the bond yield formula, yield to maturity, yield to call, and other bond yield formulas to compare the returns of various bonds.

The current yield formula may also be used with risk ratings and calculations to compare various bonds. As a general rule in financial theory, one would expect a higher premium, or return, for a riskier investment. If two bonds are held constant in respect to their risk, a higher return would be preferable.

a b

Here,a=Annual Coupon,b=Current Bond Price.

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