Definition for: Current Yield
"Current yield" is the rate of return on an investment, expressed as a percentage. For bonds, the current yield is calculated by dividing the interest collected by the current market price. For example, if a bond is paying 5% interest, with a face amount (par) of $1000, but the bond is currently trading for $1200, the current yield is 4.2%. If the bond were trading at par, the current yield would be 5%. For stocks, current yield is the annual dividend by its current market price. For example, if a stock is currently trading for $10 and pays a $0.40 annual dividend, the current yield is 4%.
