Dictionary of Accounting Terms: simple yield
simple yield
return equal to the nominal dollar interest divided by the market value(price) of the bond. It is an approximate, simplified rate reflecting the cost to the debtor and the return to the holder of a debt instrument. The yield maturity is a much more accurate measure. Assume a $100,000, 8%, five-year bond is issued at 93%. The simple yield is:
<table> Nominal InterestMarket Value = 8%×$10,000
93%×$10,000 = $800
$9300 = 8.6%
Dictionary of Business Terms: simple yield
simple yield
return equal to the nominal dollar interest divided by the market value (price) of the bond. It is an approximate, simplified rate reflecting the cost to the debtor and the return to the holder of a debt instrument.
